• One-year money is down 0.05% at 5.41%
• Two-year money is down 0.06% at 5.31%
• Three-year money is down 0.05% at 5.27%
• Five-year money is down 0.04% at 5.16%
I would like to offer a word of support for the Association of Mortgage Intermediaries. It does a great job representing brokers and lobbying the Financial Services Authority. It is also excellent at communicating important information to members. The more brokers who join, the greater the power of their voices.
Meanwhile, I can’t understand brokers who attend the Mortgage Business Expo for little more than the free stationery.
If they spent the day in the office, I’m sure they’d earn more than the cost of a few pens. I think exhibitors feed this by giving out jumbo carrier bags.
Back to the market, and Northern Rock has increased its fees. Its core range now costs 895 and low pay rate products a whopping 1,195. Its two-year fixed rate at 4.79% up to 85% LTV carries the 1,195 fee. The two-year fixed rate at 5.09% up to 85% has the 895 fee. Admittedly, unlike most other lenders Northern Rock has not increased its fixed rates recently.
Well done to Abbey, which has just launched its buy-to-let proposition. I know it has been piloting this for a while to ensure that it’s a success from the start. The criteria are 85% LTV up to a loan amount of 1m, 120% minimum rental cover. Brokers have direct access to specialist underwriters to discuss cases and landlords can have an unlimited number of properties up to a maximum portfolio of 5m. On some products there is a free valuation up to a property value of 2.5m and 250 cashback.
Don’t forget to check to see when you need to get your buy-to-let applications in by to take advantage of the rental calculation on the 4.75% base rate. Many lenders are offering a grace period for these applications.
Halifax finally withdrew its two-year fixed rate at 4.79%. It was a shame to see that it only gave about a day’s notice. This is a lot less than it had been giving recently. It also announced that its online helpdesk would shut at 6pm whereas in the past it has stayed open until 8pm.
Woolwich has expanded its retention scheme to include regulated mortgages, previously available only on non-regulated loans. It has also improved its buy-to-let proposition by reducing the documentation required. For loans up to 500,000 and with a maximum LTV of 75%, proof of income is no longer required.
On top of this, for loans greater than 75% LTV or where the maximum aggregate buy-to-let borrowing is between 500,001 and 1m, Woolwich will only ask for the the main applicant’s latest payslip and personal bank statement. It no longer requires documentation from secondary applicants or copies of the letting agreement.
The rental cover is now 125% where interest is calculated at 5%. Borrowers can build a portfolio of properties up to 5m. It is one of the few lenders that will also allow large buy-to-let loans of up to 2.5m.
Britannia has increased its maximum term to 40 years. While it claims that borrowers will have the opportunity to reduce their term once they have found their feet on the property ladder, I doubt it. If someone borrows 150,000 at 5% over 25 years, the total amount payable is 236,065. At the same rate over 40 years, this figure goes up to 347,182.
While I hate to stifle creativity I can’t bear it when business development managers send multi-coloured emails. If they start to look like an explosion in a paint factory I lose interest. One BDM for a certain life assurance company thinks it acceptable to send emails with a lime green background plus three other colours. If I had tried to read the email I would have had a headache by the second line.
Jonathan Cornell is technical director at Hamptons Mortgages