Swaps continued to decrease last week.
They actually fell slightly more at the start of the week before edging up a bit. We are still a long way away from seeing lots of lenders cut their rates but at least we are not seeing many lenders currently repricing.
- One-year money is unchanged at 4.95%
- Two-year money is down 0.01% at 5.02%
- Three-year money is down 0.01% at 5.07%
- Five-year money is down 0.01% at 5.06%
Cheltenham & Gloucester kindly sent out an email at 4pm on Wednesday explaining it was withdrawing its current range at 5pm the following day. Let’s hope it’s not trying to become the new Alliance & Leicester. To make matters worse, it did not tell us what the new range was until 45 mins before the deadline for old products. It still has a two-year fixed rate at 4.99% but the five-year fixed is now 5.25%.
Alliance & Leic-ester increased a number of its rates giving the usual generous 24 hours notice. It also launched a remortgage tracker at 4.49%, with a re-fund of valuation on completion, 20 cashback or free legals with a 499 fee.
Mortgage Ex-press repriced its range. The highlight is a two-year buy-to-let discount at 4.79%, with a 1.5% fee. BM Solutions has a slightly lower two-year tracker at base plus 0.19% for two-years for remortgages with a refund of valuation, free conveyancing and a 1.5% fee. However, after Mortgage Express’ recent criteria change, its rental calculation is now much easier.
Hero of the week is The Mortgage Works for making some incredible improvements and innovations to its range. It has launched a 90% LTV buy-to-let option for its three and five-year fixed rates. If a client wants 90% LTV on any of these rates, they have to pay an additional 1% fee, which can be added to the loan. It will now lend up to 90% with a loan size of 500,000, 85% with a loan size of 750,000, 80% with a loan size of 1m and 70% with a loan size of 1.5m.
TMW has changed its rental coverage calculation so on fixed rates the rental is now based on the pay rate, and on tracker rates it is based on the pay rate plus 0.5%. On two-year products the rental coverage is now 120%, on three-year products it is 115% and on five-year products it is 110%. Another option with its three and five-year fixed rates is to have the rental calculation at 100% of the pay rate and to pay an additional fee of 1% but this is not available on the 90% scheme. Some people will moan about the fees but it is great to see a lender giving clients these kinds of options.
Not content with the TMW changes, Portman also made a few of its own. It has reduced its core two-year fixed rate to 4.59%. It has built a switch to a fixed rate option without incurring early redemption charges into its two-year discounted rate at 4.19% and its two-year tracker at 4.29%. It has also decided to make the proc fee on all its intermediary products 0.35%. How cynical – I am sure this will make no difference to the volumes of business it receives from brokers.
Villain of the week is The Woolwich for withdrawing its excellent base plus 0.19% lifetime tracker with only two days’ notice.
What made things worse was that one of our clients was told by their local Woolwich office that it didn’t have a deadline so the client could pop in any time next week to sort out their application. If this is true, it does not do much for The Woolwich’s intermediary proposition.
Royal Bank of Scotland Intermediary Partners has joined the growing number of lenders using an affordability based lending model rather than income multiples.
The only trouble with this is that the only way of knowing how much your clients can borrow is to use the lender’s website calculator and, unless you are in front of your PC all the time when you speak to clients, that may not always be possible.
Jonathan Cornell is technical director at Hamptons Mortgages