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The majority of banks have made very few mortgage rate changes over the last few weeks, but during the last couple of days there has been a rush to lower rates. Northern Rock, Abbey for Intermediaries and the Nationwide Building Society have all reduced the price of their mortgages.

Nationwide reduced their two and five-year fixes by up to 0.3% and Abbey introduced a market leading two-year fixed rate at 2.99% - it is available through Trinity Financial. The arrangement fee is £1250 and borrowers will need a 40% deposit to access it.  Godiva Mortgages continue to offer their 1.99% two-year discounted rate and it is one of the lowest ever new mortgage rates. It is great for borrowers wanting to keep monthly costs low – the arrangement fee is 1.99% of the loan amount and capped at £1999.

Aaron Strutt, a broker at Trinity Financial, says: “We are seeing a shift from some of the bigger lenders as they are starting to lower rates again. Six months ago mortgage rates were on the rise but banks are now offering more broker exclusives and flexible options.

“Banks and building societies generally lower rates when they are not lending enough money and the latest lending figures suggest some banks are not trying hard enough.”

May 20, 2011

Mortgage lending declined to an estimated £9.8bn in April, down 14% from £11.4 bn in March and 5% from £10.3 bn in April 2010, according to figures from the Council of Mortgage Lenders (CML).

“Statistical noise, associated with extended holidays around Easter and the royal wedding, makes it harder to read the immediate market situation.” said the CML chief economist Bob Pannel.

He went on to say: “This represents an unfortunate temporary loss of signal, at a time when it would be useful to gauge the resilience of the house purchase demand to economic uncertainties and the pressure on household incomes.”

May 20, 2011

Eleven firms have applied to the Financial Services Authority for authorisation to carry out mortgage lending in the past 12 months, according to research by industry magazine Mortgage Strategy.

A freedom of information request submitted by Strategy found that the FSA has granted five permissions in 2011 for mortgage lending and eight between April 20 2010 and April 20 2011. Of those, one application was made between January, 2011 and April 20 2011.

May 20, 2010

Three members of the Monetary Policy Committee voted for a rate rise in May, the same number as April, the minutes from the meeting show.

Six members voted to keep the base rate at its historic low of 0.5%, while Andrew Sentence opted to increase it by 0.5% and Spencer Dale and Martin Weale voted to increase it by 0.25%, as they did in April.

Inflation hit 4.5% in April and Bank of England governor Mervyn King has warned that it could increase to 5% by the end of the year, but he has given no clear indication of when interest rates will rise.

Mr King is quoted as saying: “Although inflation fell to 4% in March, it remains uncomfortably high and well above the 2% target. And there is a good chance if utility prices rise late in the year, that inflation will reach 5% before falling back throughout 2012 and into 2013.”

May 20, 2011

There has been a host of rate reductions from buy-to-let lenders this week as more banks and building societies look to offer lower rates than their competitors. Godiva Mortgages offer the cheapest investment mortgages and they lowered some of their fixed and tracker rates. The Norwich & Peterborough Building Society has also returned to the buy-to-let market.

Godiva Mortgages may have the lowest rates, but they require a fairly large deposit. Their two-year fixed rates start at 4.35% and three-year fixes at 4.75%. They are available to borrowers with a 35% deposit. For investors keen to keep monthly repayments to a minimum, Godiva offers a base rate tracker at 3.29%. These mortgages have low arrangement fees compared to the rest of the market at £1249 and they all have a free property valuation.

Competitive mortgages are available to those with 25% to put towards the purchase of a buy-to-let property. Birmingham Midshires has two-year tracker at 4.35% and it has a 2% arrangement fee. There is also the option of a three-year tracker rate at 4.99% and it does not have an arrangement fee.

For borrowers with a 15% deposit, Trinity Financial has access to a two-year fixed rate at 5.99% and the maximum loan is £350,000. The arrangement fee is 2.5% of the loan amount and the mortgage is available to first-time landlords.

May 13, 2011

The average rate for a 90% LTV mortgage has fallen below 6% for the first time since March 2008, according to research from Moneyfacts.co.uk.

The typically rate for a two-year fix at 90% loan to value is currently 5.98%, 0.40% lower than a year ago. Over the last year the number of deals available to borrowers with a 10% deposit increased by 41% to 229.

Aaron Strutt, a broker at Trinity Financial, says: “More of the traditional lenders are coming back in to 90% loan to value market. Northern Rock offers one of the most competitive two-year fixes at 5.65% and it does not have an arrangement fee. Abbey for Intermediaries has also returned to the market and they have a two-year fix at 5.99% and it has a £99 arrangement fee.”

May 13, 2011

The Nationwide Building Society has launched a new regular savings account that gives first-time buyers access to their mortgages with a 5% deposit.

Save to Buy offers an interest rate of 2.5% on savings of up to £20,000 and a minimum of £50 must be put in to the savings account each month. Nationwide will also give cash back of up to £1,000 if customers take out a 95% loan-to-value mortgage with the lender.

First-time buyers must have been saving into their Save to Buy account for six months before they are eligible to apply for one of Nationwide’s 95% mortgages. The main catch with the mortgage is that homebuyers are not guaranteed to be offered a mortgage after six months, although they can be credit scored to see if they are likely to qualify.

The National Counties Building Society still offers their “family first guarantor mortgage” and it is available up to 95% loan to value. The rate is fixed at 4.99% until the 30/11/2013 and the mortgage is subject to a second charge being put on a family members property.

May 13, 2011

Interest rates on small personal loans reached record levels last month as unsecured borrowing costs hit the highest level since the Bank of England began collecting data in 2005. The typical interest rate charged to people borrowing £5,000 hit 15.58% – 2.2% higher than in 2005. Credit cards rates also increased and have risen to an average rate of 16.73%. Overdraft rates are at a near record high of 19.08%.

Even though average credit card rates are high, there are some great rates available. Nationwide offers a 17 month balance transfer rate at 0% and it also has 0% on purchases for 3 months. The balance transfer fee is 2.95%.

May 13, 2011

Remortgage lending was up by 14% by volume and 11% by value in the first three months of the year compared to Q4 2010, while house purchase lending fell 26% by volume and 27% by value over the same period.

The Council of Mortgage Lenders says that the increase in remortgage activity is likely to be linked to expectations of an increase in the Bank of England base rate.

In March the number of loans advanced for house purchase rose by 24% to 37,800 compared to February, and the value increased by 26% to £5.4bn.

Just 4% of first-time buyers took out an interest-only mortgage in March this year.

May 13, 2011

Godiva Mortgages has launched a fantastically low two-year discounted rate at 1.99% designed to keep monthly repayments to a minimum. Mortgage lenders are trying to be innovative and they are coming up with new ideas.

Godiva Mortgages is part of The Coventry Building Society and the 1.99% discounted rate offered is one of the lowest ever new mortgage rates. It is an ideal rate for borrowers wanting to keep monthly costs low – the arrangement fee is 1.99% of the loan amount and capped at £1999.

Abbey for intermediaries is increasing the pressure on its competitors and is now offering an alternative to more regular rates. They have launched a leading two-year tracker rate and it allows customers to switch in to a fixed rate at any time, without incurring an early repayment charge.  Trinity Financial has access to one of their lowest two-year remortgage trackers at 2.49% and it is available to borrowers with 30% equity in their property. Abbey will pay the property valuation and legal fees, lowering the cost of remortgaging to them.

If you would prefer a Bank of England base rate tracker mortgage, there are some great options available. The Skipton Building Society offers a two-year tracker rate at 2.28% and it has a £999 arrangement fee. Both the Godiva and Skipton mortgages require a 40% deposit.

Switch-to-fix mortgages have become more popular since the Bank of England base rate hit 0.5%. The Nationwide Building Society and The Woolwich are two of the largest lenders also offering customers the facility to switch to a fix at any point. If you are looking to purchase a property then we can access term-tracker mortgages from 2.49% if you have a 30% deposit and they have the same level of flexibility.

May 5, 2011

The average first-time buyer expects to spend 3.3 years saving for a deposit for their first home, according to research from Santander Mortgages.

The survey shows 23% of first-time buyers think it will take them at least five year to get together a deposit. 54% of those asked say that they will be using savings for their deposit, while 28% are taking on second jobs or overtime to boost their deposit fund and 27% are hoping to take out a loan.

May 5, 2011

The Bank of England has held the base rate at the historic low of 0.5% for the 27^th consecutive month.

A number of economists commented on what they thought of the decision to thetelegraph.co.uk:

• Philip Shaw, from Investec, is quoted as saying: “In recent weeks, relatively soft UK activity data … had removed any realistic expectations of a rate hike today. For now we still view an August hike to be the most likely outturn. However we will be tempted to push this back to November or beyond, should the run of activity data continue to disappoint, or indeed if the tone of next week’s Inflation Report is more dovish than we expect.”

• Graeme Leach, from the Institute of Directors, says:  ”Leaving interest rates unchanged is the right decision. The UK economy needs loose monetary policy and tight fiscal policy. Raising interest rates now would risk a contraction in the money supply, a double-dip recession and further undermine the banking system. An easing in fiscal policy and a tightening in monetary policy could result in the worst of all worlds and an even bigger budget deficit.”

• Nida Ali, from the Ernst & Young Item Club, says: “The growth outlook has become increasingly uncertain in light of this week’s more subdued PMI surveys which point to meagre GDP growth in 2011Q2 as well. Given the weak growth backdrop we could as easily see some of the more hawkish members move back towards the middle ground, as see those in the middle start voting for higher rates.”

May 5, 2011

The Building Societies Association has elected Peter Griffiths, chief executive of Principality Building Society, as its chairman for 2011/2012.  He replaces David Webster, chief executive of Hanley Economic Building Society, who has held the post for the past year.

David Stewart, chief executive of Coventry Building Society, has taken over as BSA deputy chairman from Mr Griffiths.

Mutuals approved £2.1bn worth of mortgages in March, which is up by 29% on the £1.7bn approved in both March 2010 and in February 2011. Gross lending by mutuals totalled £1.7bn in March, an increase of 8% compared to the £1.6bn in March 2010, and up from £1.5bn in February 2011.

May 5, 2011