Swaps fell pretty sharply for the second week in a row to a new all-time low. Hopefully these drops will be passed on. When you look at some of the swap rates and compare them with lenders’ fixed rate offerings there seems to be a pretty big difference.
But of course lenders have other costs to take into account as well. What is interesting though is that when swaps fall, the majority of these drops just aren’t passed onto borrowers. Three-month LIBOR is down slightly at 0.73%
1-year money is down 0.02% at 0.81% 2-year money is down 0.05% at 1.24% 3-year money is down 0.08% at 1.54% 5-year money is down 0.11% at 2.10%
Last week was pretty busy for lender activity. I guess they have finished building sand castles and are back in the office. Northern Rock has trimmed a number of high LTV rates.
Other good news is that its buy-to-let product fees have changed from percentage amounts to flat fees of £995 and £1,995 and Everyday buy-to-let rates now start at 5.59% for loans up to 70% LTV with a £1,995 fee.
Well done to Accord Mortgages, which has replaced the refunded valuation incentive with a free valuation incentive up to £470 on semi-exclusive remortgage products. The free legals remain, as does the overall fee, but the bad bit is that the booking fee rises to £195.
However, this seems sensible to prevent a deluge of speculative remortgage applications where the valuations fall hopelessly short if the lender is now paying for valuations rather than refunding the cost of them on completion.
It was sad to see the demise of In The Loop Mortgages, but I am sure if most of us were running Coventry Building Society we would have made the same decision. It doesn’t make sense to run parallel mortgage brands offering broadly similar products.
Coventry has had some excellent products recently especially some great buy-to-let rates that come with reasonable set fees rather than the monster percentage ones being charged by a number of other lenders.
It is always pleasing to see lenders responding to broker feedback. Too many lenders simply ignore feedback thinking they know best. Previously Woolwich requested additional information for underwriters only by telephone or by post.
But following broker requests it will now be requesting additional information by email. This should speed things up considerably and make everyone’s lives easier.
Nationwide Building Society has decided that borrowers need to have a mortgage for six months before they can apply for a further advance.
This seems like a sensible idea and should allow them to get some decent borrowing history before the lender hands over a large chunk of money.
Heroes & Villains
Hero of the week
is AMI for the excellent work it does on behalf of brokers. A lot of what it does is lobbying behind closed doors so it can’t shout about its success stories but the world we live in is a lot easier as a result of its efforts.
Villain of the week
is the Monetary Policy Committee’s interest rate rebel Andrew Sentance for voting for a base rate increase for the third month in a row. Now is not the time for base rate hikes. The recovery is far too fragile.