Somebody tell the Chancellor that, after 23 June, money won’t matter 2 night despite his predictions for a Brexit vote
It is hard to talk about anything other than the upcoming EU referendum and the possibility of a Brexit. While many feel the temptation to stick it to Europe and get off the European gravy train, the Remain camp has been busy banging its drum and coming out with all kinds of statistics about why we need to stay.
None more so than the Chancellor, who reckons exiting would increase mortgage rates and therefore costs for homeowners. It is interesting that George Osborne thinks he can predict the future and has produced some pretty precise numbers when some of his figures over the past few months have left a lot to be desired.
But there would undoubtedly be some initial chaos and disorder associated with a Brexit vote.
One possible outcome of an exit vote would be a panic among investors, leading to an immediate weakening in sterling that ultimately would force interest rate rises. However, there are also those who suggest it would trigger an immediate cut in rates and the resumption of quantitative easing.
Bank of England governor Mark Carney has caused some controversy by weighing in to the debate when many feel he should stay out for political reasons.
Whom you choose to believe will be down to your individual political views on Europe as a whole and, ultimately, whom you trust. No doubt we will be driven delirious by more scandalous statistics and suggestions from the girls and boys on both sides of the debate over the coming weeks.
I still think the uncertainty will leave the Remainers smiling like the cat that got the cream.
Meanwhile, gross mortgage lending is partying like it’s 1999, rising 43 per cent month-on-month in March: a massive 59 per cent higher than last year. While this can be attributed in part to the race to beat the stamp duty deadline, much can also be put down to the increase in house prices. However, it is interesting that, as prices and mortgage amounts rise, many lenders have still been slow to increase their LTV bandings to reflect this.
In the markets, three-month Libor is still at 0.59 per cent while swap rates are heading uptown once more.
2-year money is up 0.05% at 0.87%
3-year money is up 0.08% at 0.96%
5-year money is up 0.11% at 1.13%
10-year money is up 0.12% at 1.56%
So what are this week’s diamonds and pearls in mortgages? Let’s go crazy for Hodge Lifetime’s product aimed at the over-55s. With a two-year discounted rate at 3.3 per cent, two-year fix at 3.49 per cent and five-year fix at 3.95 per cent, the products allow borrowing up to age 95 on an interest-only basis for loans up to £500,000.
Party up for Metro Bank as well, which has made good changes by increasing its residential loan sizes. It now lends at 85 per cent LTV to £1m and 80 per cent LTV to £1.5m. On the buy-to-let side, while it has no minimum income it will now accept top slicing from earned income to support those with earnings of £75,000.
Meanwhile, Skipton BS has a peach of a product that allows 90 per cent LTV borrowing on new-build flats. It is priced at 3.15 per cent fixed for two years and has a free valuation and £250 cashback.
Sporting a new little red corvette is Coventry with its 10-year fix. While I know long fixes always struggle for popularity, an offset version makes perfect sense and it is priced at 3.19 per cent with no booking fees.
Halifax has applied a 1 per cent cashback up to £2,000 on all its first-time buyer products, while sister lender BM Solutions has reduced its buy-to-let rates, now available from 2.24 per cent.
Accord is the latest to tweak its buy-to-let rental calculation, up to 125 per cent of 5.5 per cent for two- and three-year fixes and down to 125 per cent of 5 per cent for five-year fixes irrespective of LTV.
New 95 per cent LTV products are shared by the beautiful ones: Furness BS at 3.5 per cent fixed for two-years with no fees; and Mansfield with a two-year discounted product at 3.49 per cent with a £199 application fee.
Newcastle BS has an 80 per cent LTV five-year fix at 2.69 per cent with no fee and a gold-rated three-year fix at just 1.99 per cent.
Finally, a big welcome to Tesco, which has finally launched in the broker market.
Until next time, I wish you heaven.