• One-year money is up 0.07% at 5.93%
• Two-year money is up 0.08% at 5.82%
• Three-year money is up 0.09% at 5.76%
• Five-year money is up 0.07% at 5.61%
Well done to The Mortgage Business for its latest marketing campaign. The wrap for Mortgage Distributor magazine (an excellent read) was brilliant. Hopefully I will recognise our business development manager when he isn’t in his Captain America uniform.
Both Alliance & Leicester andAbbey withdrew their rates last week giving littleor no notice. Abbey withdrew its rates last Wednesday evening and laun-ched a new range the following day – giving us no notice.
A&L at least managed to give a day’s notice, with notification being issued on Monday morning for a 5pm online withdrawal. Not much notice but better than Abbey.
The Mortgage Works has made a number of significant improvements to its specialist lending criteria. The maximum self-cert loan up to 85% LTV is now £1m, first-time buyers are now accepted on standard terms up to 85% LTV.
Employed and self-employed criteria have been aligned and TMW does not charge additional fees for debt consolidation. On the buy-to-let side the maximum loan amount of £5m has now been removed. Landlords can have an unlimited number of properties subject to a maximum loan of £1.5m per property.
Cheltenham & Gloucester withdrew its fixed rates last week giving a decent amount of notice. It was sad to see the two-year fix at 4.95% go. I think it is going to be rather busy for the next few weeks processing the deluge of applications it must have received last week.
It’s amazing that some journalists in the national press have accused lenders of profiteering from the base rate increase. With two-year swaps at 5.8% and lenders offering two-year fixed rates below 5.25%, even taking into account fees of up to £1,000 on most mortgages I don’t think they will be making much money if any.
The last I heard was that all of Halifax’s rates were on rate watch. Don’t delay with applications.
BM Solutions has an excellent buy-to-let rate which is available through Legal & General. It is base minus 0.31% for two years up to 85% with a £999 fee. The rental calculation is 125% at base plus 0.5%. The original L&G email said base plus 0.31% but it is definitely base minus 0.31%.
Abbey has some great buy-to-let fixed rates including a two-year fix at 5.09% for loans up to £250,000 up to 85% with a £1,999 fee. It also has a two-year fix at 5.19% with a £3,999 fee for loans up to £1m, subject to the usual LTV. For loans at the higher end of the scale, these look good.
It was interesting to see the voting of the January Monetary Policy Committee meeting when the minutes were released last week. The vote to increase was 5-4.
I doubt we will have an increase in February but various data showing strong growth in the last quarter of 2006 and higher than expected retail sales figures at Christmas means that more increases are likely before too long.
But before we get too gloomy and depressed, after the minutes were published gilts, interest rate futures and UK equities all rose as the narrow decision suggested borrowing costs may be close to their peak.
Also, in a speech last Tuesday Bank of England governor Mervyn King hinted that the rate rise cycle is near its peak. Bizarrely, he also warned wage bargainers against seeking pay deals above the rate of inflation, saying they risked embarking on a “self-defeating process of higher wages offset by higher prices”. Let’s hope our bosses don’t see this.
Jonathan Cornell is technical director at Hamptons Mortgages