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Marketwatch 16/02/2009

Swaps dropped back close to their recent historic lows while three-month LIBOR is now 2.08%.1-year money is down 0.08% at 1.65%2-year money is down 0.11% at 1.99%3-year money is down 0.11% at 2.32%5-year money is down 0.11% at 2.89%

It was interesting to see how Skipton managed to cause so much confusion by announcing to brokers that it was no longer offering mortgages on one-bedroom properties.

It subsequently apologised for sending an email suggesting this but the bizarre thing is that I know a number of brokers who contacted Skipton to see if this was an error only to be told no, it’s the new policy.

It’s good to know Skipton is going to continue to do this type of lending as it is an excellent lender.

We saw another en masse reprice from Halifax, BM Solutions and Bank of Scotland.

Although their rates aren’t challenging the best buy tables HBOS lenders are doing reasonable volumes – nothing like they did in the good old days but still decent amounts of business.

Presumably this is because years of being brokers’ favourites and the easiest to deal with still count in these troubled times. Well done to PMS which has landed another exclusive, this time with Northern Rock. The product is a three-year fixed deal at 4.19% with a maximum LTV of 65% and a fee of £995. It is fees-free for remortgages.

PMS also has a good fixed rate available through Chelsea. This is a five-year product at 4.29% with a £995 arrangement fee, the maximum LTV is 65% and it has free valuation for purchases and remortgages as well as assisted legals for remortgages. I know this will be popular so don’t delay.

Five-year fixed rates appear to be slowly edging their way down towards 4%. I reckon that once they go below this consumers will want to jump off SVRs and onto them.

With the exception of Legal & General’s two-year fixed rate from Alliance & Leicester, it seems like PMS is taking the lion’s share of exclusives at the moment.

Apparently, HSBC’s epic two-year fixed rate at 2.99% will go at the end of this month. None of the intermediary lenders have chosen to compete, although I’m hardly surprised by this.

Cheltenham & Gloucester has cut its fixed rates and its lowest two-year fix now weighs in at 3.99% with a £1,995 fee for loans up to £999,999 and 60% LTV. There’s also a 4.09% two-year fixed for the same LTV with a £995 fee and a 4.59% deal with no fee.

It is offering a 4.29% two-year fixed deal for loans up to 75% LTV with a £1,995 fee and finally there is a 4.39% rate with a £995 fee and a 4.89% product with no fee.

As before there are no two-year fixed rates up to 90% LTV. The only products at this LTV are five-year fixed rates. It would appear that lenders are trying to force 90% LTV borrowers to go direct to them. I think the highest LTV two-year fixed rate available for brokers is Nationwide’s 5.84% with a £995 fee.

And credit to Nationwide that its consumer range is also available to brokers. Not every lender can make the same claim.

A number of lenders have confirmed they will give higher LTVs to existing clients.

While it’s a shame new borrowers can’t access these LTVs at least it ensures borrowers can move to higher LTVs if they have to. There is nothing worse than seeing people stuck in properties when they need to move.

Nationwide withdrew its tracker rates shortly after the latest base rate announcement and a week later these had not reappeared. Borrowers seduced by low-rate trackers should bear in mind that the base rate won’t be 1% forever.

While UK plc is in a mess I’m sure things will get better and when that happens the base rate will go up. Some borrowers are paying 2.5% to 3% above base rate and if it goes back up to 5% they will suffer.


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