Sadly, almost all the rate competition seems to be taking place at the low LTV end of the spectrum so the best rates are seen on 60% LTV deals. The reason is that lenders look at the average LTV of their existing mortgage books and as house prices fall average LTVs go up. Winning loads of new business at lower LTVs helps to balance the books.
But lenders forget that if they all started to compete for 90% LTV business the market would recover more quickly. They haven’t got to grips with this yet.
A top tip for brokers is to make use of www.tcfinfo.co.
uk. The website provides insights into how brokers can meet the Financial Services Auth-ority’s Treating Customers Fairly principles. Best of all it’s free.
TCF is a vital part of our work that no-one can aff-ord to ignore and the website’s check- lists are invaluable resources.
There are useful case studies for pro- duct areas and topics such as lending into retirement. I’d recommend that brokers register with the website and start using this information.
It’s sad to see that some of the green shoots of recovery now sprouting in the mortgage market, such as the fact that fixed rate deals are cheaper than they were last year, have largely been ignored by the national press. Good news stories about the market do appear but are normally buried beneath items about Z-list celebrities.
Well done to Royal Bank of Scotland Intermediary Partners for its excellent London roadshow that took place recently. With seminars on subjects such as TCF and marketing, it offered brokers plenty of valuable information.
I found the event useful and interesting. RBS has made a sizeable investment in brokers and is showing that it takes the ‘partners’ bit of RBSIP seriously. Its next roadshow will take place in Manchester on November 4.
Nationwide has made a number of changes to its range and has slashed its two, five and 10-year fixed rate deals. It has also introduced a new two-year fix at 5.73% for purchases and 5.58% for remortgages. Both feature a £999 fee and are available to 60% LTV.
Its two-year remortgage tracker has been cut to 5.53% for remortgages up to 60% LTV and has a £1,999 fee. It’s a shame that Nationwide is offering much better rates on its remortgage deals than its purchases. Although it’s great that the former products are fees-free, for the market to recover we need to encourage consumers to buy houses.
The Mortgage Works has significantly improved its large loan and specialist ranges. As you would expect the best stuff is at the low LTV end. The buy-to-let range features a two-year fixed rate at 5.24% with a 2.5% fee for loans up to 65% LTV. Its two-year tracker has the same rate.
For loans up to 75% LTV its two-year fixed and tracker rates are at 5.44% with a 2.5% fee. TMW is also offering a new 10-year fixed rate deal with a 0.9% proc fee.
For self-cert loans there is a two-year fixed rate at 5.99% for loans up to 70% LTV with a 2.5% fee.
TMW also has some great large loan products for deals over £500,000. For remortgages there is a two-year fixed rate at 5.89% with a 0.25% fee available up to 65% LTV. For purchases the rate is 6.09% with the same LTV and fee. There is also a no fee product at 6.14% for remortgages and 6.19% for purchases up to 65% LTV.
Its trackers feature a sliding fees scale from fees-free to 1%. TMW’s large loan underwriters are among the best in the business. Unlike their counterparts in other lenders they exercise common sense.
Jonathan Cornell is managing director of Hamptons MortgagesHero of the week is website Tcfinfo.co.uk. It is a wonderful free resource for brokers that offers masses of information about how they can ensure Treating Customers Fairly has been correctly implemented.Villain of the week is the national media for continuing to do its best to bring the market to its knees. Good news stories are either not reported or buried on page 63 below a piece about Big Brother.