Remortgaging
Where will standard variable rates move next? Up? Down? It is impossible to tell.
It was good news for customers on Norwich and Peterborough’s standard variable rate recently. The rate dropped 0.5% to 4.95%, the same standard variable rate as Norwich and Peterborough’s new owner Yorkshire Building Society.
On the other hand, it was bad news for Bank of Scotland and the The Mortgage Business customers. These lenders, both part of the Lloyds banking group, increased their standard variable rates by 0.11% to 4.95%.
Standard variable rates (SVR) differ considerably from lender to lender. They are usually set by the board of directors and can be varied at any time. We find that many of our clients have remained on the standard variable rate as there are usually no redemption penalties, leaving them flexible to have options.
But is it time to change?
Many fixed rate and standard rates are now below standard variable rates. Some lenders are offering no redemption penalties, as well as free valuation and legal services. If the difference between the rates is enough, it might not take long to save money, even taking the arrangement fee into account.
Contact us to see if it is worth changing. And from all of us at Limetree – hope you’re having a happy Christmas!
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Let’s keep this short and sweet.
We have just heard that Natwest have reduced the cost of a 2-year fixed rate mortgage deal (at 50% loan-to-value) to below 2.5%. This is an excellent rate. Better still, it comes with free valuation and free legal fees. If that isn’t enough, the arrangement fee has been cut to only £499.
It’s a great deal for anyone looking to remortgage. But you have to act quickly – the offer will not be around for long.
Call the office on 01223 266140 for more information.
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Ever wondered why you need a mortgage broker?
Can’t you just walk into a high street bank for a loan, or phone the number you saw on the TV?
Of course you can, but your choice will be severely limited. There are thousands of mortgages out there, for people in all sorts of different situations. Fixed rate, variable rate, tracker mortgages, capped and collared…
With interest-only mortgages, you only pay back interest on the loan. With repayment mortgages, you pay back both the interest and the capital that you borrowed over the term of the loan.
Ah yes, the repayment term – how long should that be? And do you want a short term discounted deal or something that you don’t have to look at again in a few years?
What about up-front fees and the all-important deposit question – how much loan-to-value do you need to borrow?
There are other considerations too. Some lenders offer cashback. You might want flexibility in your payment schedule. If you have a decent amount of savings then now might be a good time to offset your mortgage.
The possibilities are vast. You might know what you need and are just trying to find it, or you might not know what – if anything – suits your situation the best.
We know. And that’s the point of mortgage brokers. We understand how all these different mortgages work. We know the different lenders – the ones that are hidden from sight as well as the ones on the high street.
In fact, there are thousands of mortgage products that are only known to mortgage brokers. In the last half a year alone, 3,900 new products have become available to us – products that you can’t get directly as a borrower.
Brokers find the best deal from all of the mortgages available.
So if you want real choice, talk to a broker. We can find the best mortgage for your unique situation, and get it set up as smoothly as possible. We are impartial, and the advice is free. Let us know what you need and we will do our best to help.
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Northern Rock spent the summer vigorously adjusting their rates and incentives to appeal to customers right across the borrowing spectrum.
In August they reduced interest rates in a bid to attract more first-time buyers and those who are remortgaging. They also extended their cashback incentive to a selection of their buy-to-let mortgages, hoping to entice landlords into borrowing from them.
Rates have come down by as much as 0.9% on mortgages for both purchase and remortgage customers, and better value loans with no product fees are also available for those wishing to keep initial costs down.
For first-time buyers Northern Rock have reduced selected mortgage rates on products with higher loan-to-value, including the 90% LTV.
And they have not forgotten the buy-to-let market: they are offering a £500 cashback incentive, already given with many of their other products, on all buy-to-let mortgages with percentage fees.
Safe hands
We are always glad for our customers when better deals come to the market, and especially when the lender is Northern Rock. Don’t forget, now that the company is effectively state-owned, there is no safer lender out there.
If you would like to know full details of the Northern Rock offers and whether there is one to suit your situation, we would love to talk to you.
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What is LTV again?
LTV stands for loan-to-value ratio – the percentage of the cost of a property that a lender will lend. For example, if a house costs £300k, with a mortgage at 90% LTV you could borrow up to £270k (90% of £300k). That would leave you needing to find the other 10% (£30k) up front. The higher the LTV ratio the better, because it allows buyers to purchase properties with smaller, more achievable deposits.
Over the last few years lenders have been reluctant to offer mortgages with a high LTV. This has meant that people looking to buy property have been expected to have huge sums up front as a deposit – pricing many people out of purchasing, first-time buyers in particular.
Ratio creeping up
So it was merciful news earlier in the summer when a few 95% mortgages popped up on selected new build schemes. Although these were restricted to certain new developments, it had a knock-on effect of encouraging lenders to improve the rates and terms of their 90% offerings.
Then in August, Cambridge Building Society became the first major lender to offer semi-exclusive 95% deals. Their ‘Easy Start Mortgage’ for first-time buyers has an LTV of 95% and a reduced interest rate in the first year. They also now offer two other fixed-rate mortgages at the same generous LTV for all purchasers.
Find out more
This is a major step forward in helping first-time buyers to enter the property market. We hope that it will encourage the competition to offer mortgages at similar loan-to-value ratios.
To find out if you qualify for a 95% mortgage, contact us today. Advice is free, and the latest deals from Cambridge could be just what you have been waiting for.
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