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Marketwatch 16/03/2009

Swaps all fell last week, whereas in the previous few weeks we have seen some rise and some fall.
Three-month LIBOR is now 1.91%.
1-year money is down 0.07% at 1.78%
2-year money is down 0.04% at 2.2%
3-year money is down 0.08% at 2.46%
5-year money is down 0.12% at 2.93%

It will be interesting to see what effect the Bank of England’s quantitative easing policy has on the mortgage market. Let’s hope it helps to bring more funds into the market.

When Lloyds Banking Group announced it was entering the asset protection scheme some huge numbers were mentioned regarding its commitment to new mortgage lending, but over time these seem to have been eroded.

According to our wonderful chancellor Alistair Darling, Lloyds Banking Group has committed to lend an additional £14bn this year, and that’s on top of the Royal Bank of Scotland’s £25bn.

But out of that £14bn, only £3bn is for mortgages – a drop in the ocean compared with what we need to boost the market.

It was interesting to see RBS promise to pump £1.7bn worth of mortgages into Scotland this year. I guess the rest of us will have to wait and see.

You’d have thought it would be better not to make regional promises – why can’t London and the South-East have a similar commitment?

Meanwhile, eMoneyfacts has launched a savings club. Yes, it does what it says on the tin – it aggregates savings rates. If you want to check it out, have a look at the firm’s website.

If you have any large loans to place it is worth speaking to private banks. High street banks seem to have an aversion to large loans at the moment but by contrast, private banks are happy to look at these deals and are currently offering some excellent rates. Kleinwort Benson is offering deals that track one-week LIBOR which is now below 1%. The deals have a collar of 1% for LIBOR but with margins from 0.85% for mortgages above £5m and from 0.95% for mortgages above £1m, it means it is offering rates below 2%. This makes it incredibly competitive.

Of course, these rates are only available for targeted private banking clients who have good income streams, a high level of liquid assets and large deposits available.

For the record, Kleinwort Benson is limited to 50% LTV on remortgages and 70% on purchases or for those raising capital on unencumbered properties.

It was sad to see two giants of the broking market going into administration – Cobalt Capital and Chase de Vere. Having worked closely with both firms in the past I wish their staff all the best. Chase de Vere had been trading for more than 27 years.

Royal Bank of Scotland Intermediary Partners slashed a number of fixed rates for purchases and remortgages. Its two-year fixed remortgage product at 60% LTV has a rate of 3.65%. The 75% LTV version has a rate of 3.89% and both are via its First Active brand.

For purchases via its RBS brand the 60% LTV two-year fixed rate is now 3.59% and the 75% LTV version is 3.89%. All four rates have fees of £999.

Both Abbey and Alliance & Leicester have revised their ranges.

Abbey’s two-year fixed rate at 60% LTV has gone down to 3.84%, the 75% LTV rate has gone down to 4.09% and the 30-year fixed rate at 75% LTV is now 4.34%.

It has also launched a five-year fixed rate at 75% LTV with a pay rate of 4.89% and a fee of £299.

A&L has launched a two-year tracker range at 60% and 75% LTV with the lowest rate starting at 2.79%, although admittedly this has a 2% fee. The 75% LTV version has a pay rate of 2.99%

Halifax has launched some three and five-year trackers starting at 3.69% for loans up to 75% LTV with a £999 fee. It has also reduced the rate on its 60% LTV five-year tracker to 3.49%.

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