- One-year money is down 0.01% at 4.73%
- Two-year money is unchanged at 4.73%
- Three-year money is unchanged at 4.74%
- Five-year money is unchanged at 4.71%
It was a slow week for rate changes, as I think most lenders were concentrating on their Christmas party or mulled wine and mince pies in the office. Thank goodness a few lenders did something, or this week’s column would have fitted on the back of a postage stamp.
The best five-year fixed rate from a major lender is 4.69% from Portman, though don’t forget it works on annual interest. Portman’s two-year fixed rate at 4.44% is still available. It is a shame that it is more expensive than its direct version.
The best tracker rates seem to be Abbey’s two-year 4.24% with a 699 fee up to 60% LTV, or Lambeth’s excellent 4.25%, which is available to 80% with 440 worth of fees, though again this is an annual interest product.
It is good to see Mortgage Express reprice a number of rates downwards. The new three-year buy-to-let fixed rate with 449 fee is down to 5.19% from 5.24%. It also has a three-year buy-to- let fixed rate remortgage package, with no completion fee and free valuation at 5.29%.
The three-year buy-to-let discounted rate has come down from 5.24% to 5.17%. Mortgage Trust’s excellent three-year buy-to-let rate at 4.55% with 1.5% fee lives on. This is by far the best three-year buy-to-let fixed rate available to 85%.
There are a couple of issues to which I would like to draw your attention. Open Standards will save every party in the mortgage market time and money. Imagine having a single log-in for online submissions to every lender, a single place to track every case and a single method to produce compliant Key Facts Illustrations. The list goes on and we will all benefit. Please lobby through our excellent trade body, the Association of Mortgage Intermediaries.
I also hope the Financial Ombudsman fee structure changes. As it stands at the moment it is heavily biased against large firms. Two free cases for small firms may be ideal, but as large firms transact more mortgages they are likely to have more complaints -no matter how good their services. Even if the complaint is unjustified, once you have used up your two free goes you will end up paying 360.
If the Ombudsman decides that the complaint is unjustified, there should be no cost to the firm. Personally, I think an upfront fee from the complainant, which is refunded if the complaint is justified, is a good way of stopping people trying to manipulate the system to extort money from firms.
Anyway, over in the City, three-month LIBOR is up 0.01% at 4.64%. The base rate is now 4.50%, so the market sees little chance of change in the next three months.
And 12-month LIBOR is up 0.02% at 4.73%, indicating the City thinks there may be a 0.25% increase in the base rate during the next 12 months.
Across the pond, the US Federal Reserve has increased the Fed rate to 4.25%. It is now only 0.25% below our base rate. I guess all those people who have taken out mortgages that track this rate (plus a large margin) now wish they had not done so.
Meanwhile, figures from the Office for National Statistics show UK inflation has fallen for the second month in a row, to 2.1% in November from 2.3%.
Lower petrol prices and cheaper airfares helped to push the rate down, though it still remains above the Bank of England’s 2% target. The bank will be keeping a close eye on inflation. Hopefully if it continues to fall the base rate will be cut next year.
All that remains for me to say is Happy Christmas to all of you and a prosperous new year.