We seem to be entering the final endgame where Greece is concerned, although I’m sure no-one expects the umpteenth euro meeting in 18 months to solve anything.
We can only speculate, as the press is doing, on the effects of a Greek exit on mortgage pricing. The difference between this situation and, say, Lehman Brothers is that everyone has been expecting Greece to go down for some time.
As long as attention does not rapidly turn to Ireland or Spain, it seems UK banks are now in a better position to weather the storm.
Perhaps tipped off by the International Monetary Fund’s statement that UK rates could or should be cut even further in the near future, as well as the fact that inflation has dipped a touch to 3%, swaps fell across the board.
And three-month LIBOR is now 1%.
1-year money is down 0.12 at 0.985%
2-year money is down 0.15 at 1.23%
3-year money is down 0.16 at 1.25%
3-year money is down 0.14 at 1.425%
There was quite a bit of news from what I understand was an excellent Mortgage Business Expo in Manchester last week, not least the fact that some lenders have lobbied the Financial Services Authority to ban interest-only.
Congratulations to the FSA for coming out fighting and saying that it still recognises interest-only is a valid model for some borrowers.
I was also interested to hear that FSA mortgage policy manager Lynda Blackwell dismissed suggestions that the Mortgage Market Review was responsible for a drop in lending levels and a more risk-averse market.
I am tempted to agree. While there is an element of worry over the MMR from lenders, there are clearly other forces at work and it is too easy to blame the MMR.
On the subject of interest-only, Halifax, BM Solutions and Scottish Widows now want to see full evidence of repayment vehicles on all further advance applications where part of the loan is on an interest-only basis.
This change does not apply to product transfers, or transfers of mortgaged property where there is no related further advance.
Coventry Building Society has kept up its innovative streak by releasing a buy-to-let capped tracker with a pay rate of 3.8% and capped at 5.3% up to 65% LTV.
ING Direct has retreated a touch once more, after recently reducing rates, by raising them again substantially. This seems to be the new normal, with lenders dipping in and out of the market to take their fill and then backing off to keep service levels in play. It is a sensible policy.
Meanwhile, Lloyds TSB Scotland has tweaked its Spearhead mortgage rates.
While not the most competitive, its service and underwriting are excellent. For hard-to-place cases it provides sensible, human underwriting.
Hero of the week
The Mortgage Works for still offering a great choice of products, good service and supporting the buy-to-let market. All we need is more competition in an ever-important market for brokers.
Villain of the week
The lenders that are secretly trying to get interest-only banned by the Financial Services Authority. If you don’t like it, say so publicly and remove the option from your policy. Don’t ask someone else to do your dirty work.