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Market Watch

Swaps rose sharply last week, reversing recent drops.

  • One-year money is up 0.06% at 4.56%

  • Two-year money is up 0.10% at 4.52%

  • Three-year money is up 0.10% at 4.53%

  • Five-year money is up 0.11% at 4.54%

Bank of Ireland has taken the brave decision to withdraw all of its standard rates to preserve its service levels. For this honesty it wins hero of the week. It tried to slow applications down by increasing its rates but when that failed it was faced with either building backlogs or withdrawing rates. Most lenders would have done the first without any qualms but BoI took the harder decision. Despite the rate pull, the company’s service is as good as ever.

Villains of the week are those in our industry who have become political correctness mad. I am surprised people have complained that the BM Solutions online character, Red, is sexist. She just looks like a smartly dressed successful businesswoman to me. And anyway, she was thought up by the BMS’ marketing team who are all female, not a bunch of leering old blokes as some seem to think. I’m sure if the new character had been an attractive male, BMS would have been accused of sexism for implying only a man could undertake the role.

Rate of the week is Lambeth’s two-year fix at 4.15%. For remortgages there are reduced survey and legal fees. There is a booking fee of 95 and a product fee of 345 is added to the loan on completion. Sadly the maximum loan size is 350,000 and the maximum LTV is 80%. The proc fee is 0.25% with a minimum of 200 and a maximum of 600.

Principality has launched a decent penalty-free 5.40% three-year, buy-to-let tracker rate with free valuation and conveyancing. This product is only available through brokers. The rate is 0.90% above base for three years and is available to 75% LTV. The rental assessment is 130% of the pay rate and a 499 fee can be added. It’s good to see a lender with a branch presence offering a broker exclusive.

C&G has revealed that on its new premium pricing, the two-year fixed rate is 4.49% and the three-year fix is 4.69%. Its new high value pricing has also been confirmed. Loans over 1.5m will have to be on a premium product and will now come with a fee of 995. The clients will pay for the survey and the tracker product at this level will have penalties. This is a shame but I can see why the company has done it.

Northern Rock has cut its two and five-year flexible buy-to-let base rate trackers. The two-year rate is now 5.59% (base plus 1.09%) and the five-year rate is now 5.79% (base plus 1.29%). All its residential, lifetime and buy-to-let end dates have been extended to January 1.

The Mortgage Works has cut a number of its self-cert fixed rates. It now has a two-year fix at 4.75% and a five-year fix at 4.75%, both with 595 fees. There is also a two-year fixed rate at 4.49% with a 1% fee. The two-year discount is now 4.95% and this fee is 595. All of these are available to 85%.

If you haven’t done so already, why not try Bank of Scotland’s High Value loan unit. It is based around a team of experienced underwriters who pride themselves on taking cases from receipt straight through to completion.

If you have cases with problem rental calculations, don’t forget GMAC-RFC’s products which allow you to chose the level of the rental calculation and pay a fee based on this. The more benign the calculation, the higher the fee. If the client pays a 1,495 fee they can have the rental calculation at 100% of the pay rate of base rate plus 0.99% for life.

Three-month LIBOR is unchanged at 4.60% so the City sees little chance of base rate change in the next three months. Twelve-month LIBOR is up 0.06% indicating there will be no more cuts in base rate in the next 12 months.


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