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Market Watch

Swaps continued their increase before falling sharply at the end of last week.

  • One-year money is down 0.08% at 4.66%
  • Two-year money is down 0.11% at 4.65%
  • Three-year money is down 0.13% at 4.66%
  • Five-year money is down 0.15% at 4.65%

Hopefully this will at least stem the flood of rate changes. But we’ll have to see a few more weeks of falls before any lender cuts their fixed portfolio. Any two-year fixed rates under 4.50% now look pretty good value.

Hero of the week is The Woolwich for bringing its processing back inhouse rather than continuing outsourcing with Global Home Loans. This will make life easier.

Villains of the week are those who went to the Mortgage Business Expo solely for the stationary. If they had spent the day in the office I’m sure they would have earned more than the value of what they scavenged. But I’m not sure who are the worst culprits, the people who do this or the lenders who give them rucksack-sized carrier bags for their loot. Expo is a worthwhile event but I’m pleased it’s over as my desk and email inbox were overflowing with invitations to visit stands.

BM Solutions finally pulled its mainstream tracker rates. These have undoubtedly been the most competitive rates of the year for non-small loans. The 4.09% two-year fixed rate is still available but I’m not sure for how much longer.

Bank of Scotland repriced its portfolio but the good news is that its core two-year fixed at 4.49% and large loans two-year fixed at 4.39% deals are still available.

The One account tweaked its flexible rates. Clients can now have a 12-month discount with a 499 fee, a 12-month discount with no fee or a two-year discount with a 499 fee. The latter is only available through brokers. Lucky us.

Nationwide has increased its fixed rates. The two-year fixed rate has gone up from 4.59% to 4.74% and the three and five-year fixed rates from 4.79% to 4.94%. I wonder why Nationwide puts the email title and first two lines in capitals. I hate excessive capital usage. It looks like SHOUTING.

I was surprised to see an email from Cheltenham & Gloucester saying, “…fixed means fixed at C&G. While other lenders are re-pricing upwards, we’re keeping our fixed rates low – from just 4.49%.” Why is it able to send us emails telling us its rates are not changing when it can’t send us emails when its rates change? Bizarre.

Chelsea withdrew its fixed rates and replaced them with some more expensive ones. The two-year fixed rate has gone up to 4.55%, the three-year fixed is now 4.75% and the five-year fixed is 4.85%. For some reason, rather than including the new two-year fixed at 4.19% which has a one-year extended early redemption charge in the fixed rate part of the email, this is listed as a fixed rate tracker. A bit silly and misleading. Yes, it does go to base plus 1% after the two years are up but the ERCs are for three years. Why not be honest and list it in a section called fixed rate with ERC?

Northern Rock has added to its flexible fixed rate range with a two-year fixed rate at 3.99% up to 85% LTV and 4.19% up to 90% LTV. Both come with a 1.5% fee. They look very good value when compared with existing rates. There is also a new buy-to-let fixed available to 87% LTV at 4.99% with a 1.5% fee. NR also launched a pair of buy-to-let deals – a 5.42% fixed for two years and a 5.24% two-year discount at 5.24%.

There are also a number of new residential deals including a two-year fixed at 4.73% and a five-year fixed at 4.99%, a two-year discount at 4.59% and a three-year discount at 4.74%.

In the City, three-month LIBOR is unchanged at 4.62% so the market sees little chance of a base rate change in the next three months. And 12-month LIBOR is down 0.04%at 4.68% so the City thinks there might be a 0.25% rise in the base rate in the next 12 months.

Jonathan Cornell is technical director of Hamptons International Mortgages


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