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Swaps have posted significant increases since the start of December. Short-term rates are up about 0.25% and longer term swaps are up almost 0.3%. I expect to see fixed rates increasing sharply over the coming weeks so get cracking with any fixed rate applications.

One-year money is up 0.10% at 5.58%
Two-year money is up 0.12% at 5.52%
Three-year money is up 0.14% at 5.5%
Five-year money is up 0.14% at 5.39%

Northern Rock was certainly not resting over the Christmas period as on December 28 it revealed that as a result of swap rate increases it was going to raise its product fees. Products with 895 fees are increasing to 995 and products with 1,195 fees have increased to 1,295.

It did manage to give a decent amount of notice with a closing date of January 7 for applications on the previous fee levels. Northern Rock’s flexible fixed rates have all been increased by 0.2%.

While I understand that the fee increases are probably mitigating some of the potential rate rises and Northern Rock offers a nil fee range, fees of 995 and 1,295 are high. Other lenders have been able to sell products with even higher fees but the rates have been more competitive.

Not content with one change, Northern Rock has announced that it has increased its help with costs to 700 until the end of January.

Northern Rock certainly keeps us busy with rate changes and launches. I’ve just done a rough count and the number of changes last year was more than 20, and it gets close to a change every two weeks. I find it impossible to keep up with what its current offering is. This is a real shame as it is an excellent lender.

Woolwich repriced some of its fixed and tracker rates. The two-year fixed rate is now 5.39% and the fee-free tracker has increased to base plus 0.39%. Sadly, its excellent two-year fixed rate at 5.19% and base plus 0.19% for life afterwards has not been replaced.

But there is now a two-year tracker from Woolwich at base minus 0.01%, going to base plus 0.17% for life with no early redemption charges for life and a five-year rate at 4.98%. Both these rates have an 1,495 application fee, a maximum LTV of 80% and a switch and save package for remortgages. Woolwich has also simplified its buy-to-let range and criteria.

The Derbyshire has launched some buy-to-let rates which track Swiss LIBOR. There is a 4.67% rate (2.71% above Swiss LIBOR) at 80% LTV and a 4.77% (2.81% above Swiss LIBOR) up to 85%. Both these rates have a 1.5% application fee.
I do like the way that the Derbyshire puts service updates on its rate emails. All cases are being underwritten one day from receipt and the society’s average time to turn round an offer is 10 working days.

It is interesting to note that the Swiss three-month LIBOR rate is up about 1% over the past 12 months or so, whereas sterling three-month LIBOR is only up about 0.66% in about the past 12 months.

The Mortgage Works has recently changed its identity criteria system. It will now use electronic ID so brokers will not need to submit ID with applications. If they cannot satisfy the identity search brokers will be asked to submit an introduction certificate or certified copies of ID. Clients can now also pay their valuation and assessment fees by debit card.

Cheltenham & Gloucester has announced that it will fast-track up to 95% LTV if a client receives a top credit score. If it does need proof of income it will normally accept one payslip and it will now lend on the basis of income rises up to three months in advance. It will, as we would all expect, ask for proof of income on some of these fast-tracked cases.

Jonathan Cornell is technical director at Hamptons Mortgages


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