Swaps fell pretty significantly last week. Two and three-year swaps are now at record lows.
1-year money is unchanged at 0.93%
2-year money is down 0.13% at 1.61%
3-year money is down 0.14% at 2.21%
5-year money is down 0.09% at 3.03%
Three-month LIBOR is up 0.02% at 0.63%.
The Bank of England’s quarterly inflation report made gloomy reading as it was more negative about the economy than most analysts were predicting.
But the Bank is a lot less worried about inflation than expected – it is set to rise but then fall back quickly.
Most experts are now predicting that the base rate will remain at 0.5% for most of this year.
The most pessimistic seems to be Roger Bootle, managing director of Capital Economics, who thinks the base rate will remain below 1% for five years. I doubt many agree with him.
The specialist market always shows a high degree of innovation. Competing on price is a non-starter but there are always some firms that stand out by offering products that meet different needs.
We have seen Savills Lending Solutions launch an express bridging product funded by Lowry Capital that aims to complete within five working days.
And last week All Types of Mortgages reported that it is doing more complicated prime cases that don’t fit standard high street lending criteria. There must be a vast number of borrowers who don’t fit standard criteria but make great sense for mortgages.
NatWest has launched some excellent rates via a number of mortgage clubs. Highlights are a two-year tracker at base rate plus 2.19% for loans up to 60% LTV with a £999 fee and a two-year tracker at 90% LTV at base rate plus 4.49% with a fee of just £99.
The website for the new brand still seems to be at Royal Bank of Scotland Intermediary Partners. As a result of recent changes it seems directly authorised brokers cannot submit business directly to NatWest Intermediary Solutions.
Well, you can but you’ll only get a proc fee of 0.1%. To get a slightly more generous proc fee you’ll need to go through a club. I can understand why lenders are keen for small brokers to use clubs but to force DA brokers of all sizes to do seems a bit much.
It’s worth knowing that RBS offers a self-build proposition through its private banking division for clients to build or renovate properties for their own occupation.
It is subject to maximum of 70% of project costs, these being land cost or value if owned already plus build or renovation costs. Sadly, self-build lending is a lot harder than it used to be.
And Abbey for Intermediaries has launched a range, the highlight of which is a five-year fixed rate at 4.99% for loans up to 70% LTV with a £995 fee. It is available up to £1m.
HERO OF THE WEEK is BM Solutions, which has launched fantastic buy-to-let rates with fixed rather than percentage fees. There is a two-year fixed rate at 4.24% and a two-year tracker at 4.85%, both with fees of £999 and available up to 60% LTV.
VILLAIN OF THE WEEK is Bank of England governor Mervyn King who says the Special Liquidity Scheme will end next January. Expect mortgage rates to rise by the end of the year as banks are forced to use more expensive funding.