Another round of product and rate changes

Brokers were faced with another surge of product changes last week as lenders strived to balance service standards with spiralling business volumes and funding costs.

Woolwich kicked off the changes last Monday. It withdrew a range of trackers including its base rate plus 0.74% and 0.99% offset deals at 60% and 80% LTV respectively. It also withdrew its base rate plus 0.74% and 0.99% lifetime trackers.

Mortgages PLC then withdrew its fixed rate products in a bid to control new business volumes. The Merrill Lynch subsidiary slashed its maximum LTVs to 70% and cut its maximum loan size to £300,000.

It is also pulling its self-cert and Right to Buy deals while raising rates on all remaining products by 1%.

Applications submitted on existing terms will be accepted until close of business today.

Wave withdrew its two-year fixed rate and buy-to-let near-prime deals and reduced its maximum LTVs from 80% to 75%.

It hiked its three-year fixed rate from 6.28% to 6.78%, its two-year tracker to 6.88% and its three-year tracker to 6.68%.

It also increased its near-prime three-year fixed rate to 7.18% and its two and three-year near-prime trackers to 7.38% and 7.18% respectively. The completion fee for all Wave deals has risen to 2%.

On Wednesday Accord Mortgages withdrew a range of fixed rate deals, including its prime three and five-year products and three and five-year remortgage deals.

The lender says it has yet to decide whether it will replace the deals.

Finally, Royal Bank of Scotland Intermediary Partners overhauled its First Active, RBS, NatWest and the One account product ranges. Chris Pearson, director of intermediary mortgages at RBS, attributes the move to high business volumes, which he says have put significant pressure on service levels.

Danny Lovey, proprietor of The Mortgage Practitioner, says: “Thanks to the flow of remortgages and the recycling of Northern Rock deals, the market is having to absorb more business with less lenders.

“Maybe the liquidity crisis will be less strained when the financial year ends but I’m not holding my breath. The future is grim for remortgagers, first-time buyers and home movers.”