The sooner we see more banks return to profit the sooner we will see lenders offering more niche mortgages.
So Santander’s announcement of a £1.7bn profit for 2010 was good news.
Kensington has returned to the buy-to-let scene offering 85% mortgages. Clearly it thinks there is money to be made from this type of mortgage. You can see where the profit comes from when two-year fixes are priced at 6.99% with a 2.5% arrangement fee.
Potential investors will be pleased there are mortgages available again that do not need a 50% deposit. Now one lender is offering 85% we may see one or two others return to the market.
Nationwide is set to launch its large mortgages and it seems likely it will offer up to £3m.
If mortgage rates are to be made available for such a large amount there are some hurdles to get over such as the current £500 monthly overpayments limit.
It was also good to see Abbey reduce some of its £2m maximum mortgages.
Halifax has lowered its rates by around 0.3% and will potentially still lend up to £7.5m, but I don’t think it will be on interest-only.
Lenders continue to make rate changes with some offering more discounted variable mortgages.
Instead of continuing with short-term market leading trackers, HSBC replaced some rates with more manageable two-year discounted offerings starting at 1.99%.