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An eventful week for the UK and the eurozone has been accompanied by continuing lender competition over reduced-rate mortgages

Montlake Andrew MS blog 150

Well what a week to be a chancellor, governor or an Italian politician eh?

As expected Blighty lost its cherished AAA rating and in response 10 year gilt yields actually dropped, which shows how unexpected the move actually was from a ratings agency who, let’s face it, I am amazed anyone pays any attention to these days.

Perhaps this is not that fair on those economists who expected a rise in gilts, but in a “you could not make this up” moment, Italian citizens voted back the Euro crises and saved our safe haven status for now at least.

Although we could still see a stirling crises over the coming weeks as it weakens further, with the inflationary concerns that brings as imports get more expensive, in the mean time the Bank of England was busy mulling over the tactical use of negative interest rates. As far as my mortgage is concerned that is music to my ears and will no doubt fuel the race for ever lower mortgage products. However whether this actually works is open for debate.

Although it is of course not this simplistic, by my reckoning the fact that talk of negative interest rates has made it into the public domain shows they are pretty serious about it – so watch this space.

In the markets, three-month libor ain’t going anywhere these days and is settling comfortably at 0.51 per cent, while swap rates have fallen yet again which is unsurprising with all the negative rate talk.

1-year money is down 0.03 at 0.465 per cent
2-year money is down 0.04 at 0.61 per cent
3-year money is down 0.07 at 0.70 per cent
5-year money is down 0.12 at 1.045 per cent

In the product world Abbey for Intermediaries kicked off its seven day sale bonanza again with a decent two year fixed rate up to 75 per cent LTV priced at 2.49 per cent with a £995 fee. It is also reducing a plethora of other rates as well.

This undercuts Halifax’s new two year exclusive which is priced at 2.94 per cent with a minimum loan size of £150,000. Halifax is also busy reducing its products elsewhere as well by up to 0.3 per cent.

While Halifax edges it on underwriting flexibility, for now at least, both these lenders are top notch service wise and Abbey are one of a handful of lenders who can cope with the seven day sales idea.

Accord Mortgages has been busy reducing products at 90 per cent LTV and now offers a two year fixed at 4.09 per cent with a £1,995 fee or 4.14 per cent with a £995 fee. Its five year deal with similar fees is priced at at 4.39 per cent and 4.44 per cent respectively.

It has also released new buy-to-let products which are available from 3.39 per cent with a 1.75 per cent completion fee.

Scottish Widows Bank has also tweaked its rates downwards on its professional and flexible products.

Meanwhile Yorkshire has launched the lowest ever five year fixed rate at 2.64 per cent with a £1,495 fee. I still think during the course of this year we will see a 2.49 per cent five year fix.

In other news Aldermore Residential Mortgages is now accepting full gifted deposits on residential and buy-to-let applications, while Platform has made a smattering of changes to an increasingly impressive suite of products.



ING Direct’s application deadline is 5 March. Julian, David, Joan and the rest of the team ING Direct did a fabulous job and will be sorely missed. I am sure they will all be a part of the industry somewhere.


Bank of Ireland for whacking up its tracker rates for 13,500 of its buy-to-let and residential mortgage customers without much warning and in such a dramatic fashion. Is this really Treating Customers Fairly in action?


Bob Hunt 150

Size matters on capital adequacy

Although existing capital adequacy requirements sometimes get a bad rep for spoiling banks’ appetite for mortgage lending, such measures are vital to prevent a repeat of the calamitous collapses that saw the public have to bail out the banks during the global financial crisis. That said, it is important that we keep a watching brief […]


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