- One-year money isup 0.05% at 4.70%
- Two-year money is up 0.07% at 4.72%
- Three-year money is up 0.05% at 4.74%
- Five-year money is up 0.04% at 4.76%
Any fixed rate which has been around for more than three weeks should be seen as a rate not likely to last, so applications should be sent off as soon as possible.
Hero of the week is BM Solutions for introducing the ability to use its online system to process further advances. Most lenders are not interested in further advances so it’s great to see one allowing us to do this on behalf of our clients. It’s all very well being able to sell a mortgage to a client but when they need to borrow more money they don’t take kindly to being told to go to call centre oblivion. I hope more lenders follow suit.
Villain of the week is the extended tie for a low rate two-year fix. I think these kind of products don’t comply with the principle of treating customers fairly. What’s the point of being able to get a sub-2% fixed rate if you are tied into the SVR of 6.5% for four years or so? Are clients really so desperate for mortgages they are willing to tie themselves into something like this?
BM Solutions has withdrawn its incredible residential two-year fixed rate of 3.89% and replaced it with a 4.09% rate. As usual it gave a decent notice period so we could get our applications in. The tracker rates of 3.75% and 3.99% remain on the market. For most loans in excess of 150,000, these products remain best in class. As far as I can tell, the awesome BM Solutions service remains as good as ever despite having these market-leading rates.
Lambeth has finally withdrawn its long-standing 4.15% two-year fixed rate. I did not expect it to survive for more than a couple of weeks, let alone a month. It’s good to see Lambeth allowing a week for applications to come in.
Alliance & Leicester pulled its fixed rates giving the traditional 24 hours or less notice. The new core two-year fixed rate with a maximum loan of 250,000 is now 4.59%. This has increased from 4.49%. The larger loan fixed rate for loans in excess of 250,001 is now 4.69%. This has increased from 4.54%. The five-year fixed rate has gone up from 4.74% to 4.79%.
Portman has increased its five-year fixed rate from 5.54% to 5.69%. As this product needed to be booked it’s good to see we had more than a day to send in applications.
While some lenders claim it is acceptable to give 24 hours or less notice to withdraw fixed rates, based on recent performance most seem able to give at least two or three working days’ notice for us to send in applications. The ones who offer less notice than this do not give us sufficient opportunity to send in our client’s applications, which makes us look foolish. Great rates are not so great if you don’t have the chance to sell them.
Well done to Bank of Scotland which has not increased its fixed rate portfolio.
At present, it has some great fixed rates including its large loans fixed at 4.39% and its core two-year fixed rate at 4.49%. I reckon any two-year fixed rate below 4.5% is now good value.
Northern Rock increased its flexible fixed rates by 0.1%. The two-year flexible fixed rate is now from 4.59%, the three-year flexible fixed rate is from 4.69% and the five, seven, 10 and 15-year flexible fixed rates are from 4.99%.
Principality has launched a great two-year fixed rate at 4.39%, which has free legals for remortgages.
Three-month LIBOR is up 0.03% at 4.61%, so the market sees little chance of a base rate change in the next three months.
Twelve-month LIBOR is up to 4.69%indicatingthe City envisages a 0.25% rise in base rate in the next 12 months.
Jonathan Cornell is technical director at Hamptons International Mortgages
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