Alliance & Leicester is lowering its Standard Variable Rate (SVR) from 4.99% to 4.24% for new customers, bringing it in line with Santander’s SVR. All new A&L mortgage products will now revert after their initial rate to a Bank of England base rate tracker at +3.74%, currently 4.24%. The move follows court approval for the legal transfer of Alliance & Leicester to Santander UK on 28 May.
A new Homeowner Variable Rate is being introduced for new Lloyds TSB and Cheltenham & Gloucester mortgages from 1 June 2010. No existing mortgages are affected by the introduction of this rate, they will remain on the existing Standard Variable Mortgage Rate which is currently 2.50% (Bank of England tracker at +2.00%). The Homeowner Variable Rate of 3.99% will apply to new Lloyds TSB and Cheltenham & Gloucester mortgages from 1 June. This is not a tracker and can be altered at anytime. This makes staying on the C&G’s base rate less attractive for clients in the longer term, so look out for remortgage opportunities.
Northern Rock will no longer accept certain repayment vehicles on its interest-only mortgages. It will not accept inheritance, bonuses, dividends, regular overpayment and an intention to convert to repayment at a future date as acceptable repayment vehicles. In March the lender reduced its maximum Loan To Value from 85% to 75% for interest-only. In addition, the acceptance of sale of property as a repayment vehicle will be limited to cases with a maximum LTV of 60% and £150,000 minimum equity. The bottom line is that Northern Rock want to do repayment mortgages!
Andrew Fowler worked for Limetree Financial Services until December 2010. Feel free to contact another member of our team for help or advice.