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Marketwatch 09/02/2009

Swaps continued to edge back up last week. Three-month LIBOR is now 2.16%.

1-year money is up 0.05% at 1.73%
2-year money is up 0.03% at 2.10%
3-year money is up 0.01% at 2.43%
5-year money is unchanged at 3%

Halifax, BM Solutions and Bank of Scotland all repriced on Friday afternoon. It’s bedlam when they all reprice at the same time. I can understand the need to coordinate the withdrawal of self-cert products but why does HBOS always do this?

Why can’t it stagger its rate pulls so we don’t have to try to work out which deals are disappearing and which are just going up or down?

I would hazard a guess that our partly nationalised lenders will continue with their dual pricing policy.

Having spoken to one of them, it seems they need to show the government that they are lending and pricing competitively but if they gave brokers the same products they would be swamped with business.

Sadly, this means their direct offerings massively undercut their broker deals but as their branches and direct channels don’t produce vast amounts of business they can achieve volumes of business they know they can handle.

They can also show the government that they are doing their bit to support mortgage lending. The government has no idea that the volumes of business this generates will do nothing to support the market.

Cheltenham & Gloucester has nailed its colours to the mast and confirmed that whatever happens with the base rate its SVR will fall accordingly.

Falls in SVRs make our lives more difficult as the difference between them and remortgage rates increases.

The political madness in which we live means that banks are under pressure to pass these cuts on, whereas anyone could tell the government it is new rates and criteria that are crucial to our industry.

Accord Mortgages has taken a fairly sharp knife to its income multiples. This is bad news for consumers on low salaries as the multiples for those on between 10,000 and 19,999 is now a meagre 2 x income.

I recently looked at a two year old email from Accord regarding income criteria. Back then it said that those on salaries between 15,000 and 24,999 with high credit scores got 3.75 x income.

The Mortgage Works withdrew all its tracker rates a couple of days before the base rate announcement.

It gave about 90 minutes’ notice for decisions in principle but I understand it had technical problems that meant the deadline was extended so brokers could build their snowmen.

C&G has launched a number of three-year fixed rates. There is 100 off the 995 standard product fee, a couple of LTVs up to 60% and 75% and a 100 contribution to Team GB and Paralympics GB for each completion. I’m sure this won’t be the last link to the Olympics we see in the next three years.

Abbey has trimmed its fixed rates by up to 0.2% on its two and three-year 75% LTV products.

It has also introduced a market-leading fees-free two-year fixed rate at 75% LTV with a pay rate of 4.49%. This is 0.5% per year cheaper than the equivalent Nationwide deal.

Nationwide has cut its fixed rates. Its lowest two-year fixed rate is 4.09% with a 995 fee for loans up to 60% LTV. For loans up to 75% LTV the two-year fixed rate comes with a 995 fee and the headline rate is 4.29%.

Meanwhile, its three-year fixed rates look much better value at 4.38% for loans up to 60% LTV. For first-time buyers the fee is only 299 but for everyone else it is 995.

And good luck to PMS following its rebrand. It seems a sensible idea to change branding to reflect other types of products brokers can sell.

PMS still has an incredible two-year fixed rate at 3.49% via Hinckley and Rugby.


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