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Marketwatch

Swaps raced up again last week. I am shortly going to have to increase the scale of the Y axis on the graph for the second time since I’ve been writing it. Two-year swaps have gone up by 1.75% in just under two years. At 6.07% they are more than 0.5% above the base rate.


One-year money is up 0.07% at 6.15%

Two-year money is up 0.08% at 6.07%

Three-year money is up 0.07% at 6.03%

Five-year money is up 0.07% at 5.91%

While most people expect further base rate increases, the Bank of England’s inflationary report shows that one more increase should be enough to bring inflation back on track.

BM Solutions has made a number of improvements to its Mortgage Plus product. The previous version promised a lot but suffered from little take-up, but the good news is that all the improvements we’ve asked for have now been delivered.

The product’s unsecured element can now be used for deposits, interest-only options are available and its maximum permitted term has been lengthened to 35 years.

While the last point seems minor, it is crucial. Borrowers who take the product’s longest term should make it through the affordability-based income decision, whereas on its previous maximum term of 25 years the majority were rejected. BM Solutions has also increased its proc fee to an excellent 0.6%.

Cheltenham & Gloucester withdrew its fixed rate broker exclusive range at close of play on the Friday before the bank holiday. This gave brokers just one working day’s notice and was particularly unhelpful because many of them may not have been in the office when the notification arrived.

Looking at the withdrawn rates, I’m surprised at the urgency but I guess pressure on C&G was increased by other lenders withdrawing their products. That said, all the others gave a decent amount of notice.

Although GMAC-RFC has launched some excellent mainstream rates, they may be gone by the time you read this. Swap rate increases and competitor rate withdrawals mean volumes must be going through the roof. The lender has sent out communications saying these rates may be withdrawn at short notice. Sadly, one email I received had the word withdrawal spelt incorrectly. I know we’re all busy but doing a spellcheck should make it easier to get things right.

Well done to Northern Rock, which last week increased some of its proc fees. All 0.3% proc fees (payable on residential one and a half, two and three-year flexible fixed rates and all residential trackers) have been increased to 0.4%. Its Together special offer proc fees will rise from 0.5% to 0.55%. And its 150 online bonus will continue. It has also increased its entire range’s rates by 0.1% as a result of the recent swap rate increases.

Halifax has increased its fixed rates. Its 5.19% two-year fixed purchase rate has gone up to 5.34%, available up to 90% LTV with a 1,499 fee.

Its two-year re-mortgage fixed rate is up from 5.34% to 5.49% and is available up to 750,000 at 90% LTV with a 999 fee.

It has a remortgage two-year fixed rate at 5.79% with a 299 fee up to 1m and 90% LTV, plus a 5.74% two-year fixed purchase rate up to 7.5m and 90% LTV with a 299 fee.

NatWest’s rental calculation now has three tiers based on individuals’ household income. For applicants above 75,000, the rental cover required will be 100% at base rate plus 0.75%. For applicants between 30,000 and 75,000, the rental cover required will be 110% at base rate plus 0.75%. For all other cases, the cover will be 125% at base rate plus 0.75%.

Since Chris Pearson joined Royal Bank of Scotland Intermediary Partners as head of corporate sales, he has been quiet. I’m sure over the coming months he will make steady improvements to RBS’ proposition and once he is confident that everything is in place we’ll hear from him.

Jonathan Cornell is technical director at Hamptons Mortgages

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