Lenders cut more mortgage rates

If you have the money for a large deposit, some rates are below 6% Another round of rate cuts has been announced by the Halifax, one of the UK's biggest mortgage lenders. Several of its most popular fixed or tracker-rate deals are being cut by an average of 0.25%, for borrowers who can put down a deposit of at least 25%. The changes apply to deals arranged through mortgage brokers. The new rates highlight the trend of recent weeks in which many lenders have made a succession of small reductions to cut headline rates to 6% or less. "We are simply passing on the recent cut in swap rates [the cost of borrowing between banks]," said a Halifax spokeswoman. Wider range In the past week, other lenders, such as the Newcastle building society, Yorkshire building society and the nationalised Northern Rock, have also reduced the cost of some of their deals. "Most lenders have been cutting selective rates rather than everything," said Ray Boulger of mortgage brokers John Charcol. Other lenders, such as the Bristol & West, Woolwich and the Coventry building society, have also started to widen the range of mortgage deals they offer. For instance, the Coventry, and also the Britannia building society, now offer their best deals to customers who can put down a deposit of at least 50% of a property's value. Mr Boulger said lenders now appear to have become a bit more relaxed about lending than they were earlier in the year, with the cost of loans where customers put down a 10% deposit also becoming cheaper. "More lenders will come in with cheaper fixed rates in the next week or so," he predicted.   BBC August 2008

Better outlook for mortgages (July 2008)

The outlook for mortgage rates has improved thanks to a dramatic fall in swap rates over the last month.

Rrecent news that Nationwide is to cut both tracker and fixed rates could be a sign of things to come. For far too long, the status quo of the mortgage market has been increasing rates and misery for most borrowers. The crunch has seen liquidity in the market all but dry up, but news from Nationwide that they are cutting both tracker and fixed rates will come as a huge relief for all borrowers.

Swap rates have dropped by 0.7% from a peak a month ago. As lenders use these rates to determine the price of their fixed-rate mortgages, it should allow them to offer better priced products, as Nationwide has. I would hope to see other lenders follow suit soon bringing some much needed competition to a market that has been depressingly bereft of vying lenders.

The good news does not stop at just fixed rates either. Nationwide has also reduced the price on its tracker mortgages with the most significant movement on its lifetime tracker, coming down an impressive 0.36% to Bank Base Rate plus 0.98% for those with a 25% deposit – albeit with the introduction of a modest £599 arrangement fee.

With the Base Rate likely to fall soon, according to industry experts this deal should be good value for borrowers happy to sacrifice the security of a fixed rate. Yet, with the ability to drop into a fixed rate at any time, this does offer the added security that some people will crave.

Borrowers could save money by using a broker

Borrowers could save up to £1,830 per year if they went to a mortgage broker instead of going direct to a lender, according to the Association of Mortgage Intermediaries (AMI).

The figure reflects the difference between the average cost of a Standard Variable Rate (SVR) mortgage – most frequently offered by lenders – compared to a fixed rate, which is the most popular choice offered by mortgage brokers or intermediaries.

According to AMI, the average annual saving achieved from getting a mortgage through a broker is £962 per annum. With just under 1.36 million intermediary mortgage sales in the 2006/07 financial year, the savings achieved by brokers for their clients amounts to between £1bn and £1.2bn per year.

Chris Cummings, director general of AMI, said: "Intermediaries are able to identify the most suitable product for the consumer at a competitive price. Independent research suggests intermediaries could save consumers £1,830 per year compared with going direct to lenders. In these difficult times it is more important than ever for consumers to access good financial advice.”

OLD NEWS 

Price inflation has made property seem as unbeatable investment

A majority of British people believe buying property is now a safer place to put their money than saving with a bank or building society.

Research for the BBC Two series, The Truth About Property, found 53% of respondents believed owning property was safer than cash.

The poll took place in the aftermath of the Northern Rock crisis, the first run on a British bank in nearly 150 years.

The findings come despite mounting evidence of a slowing housing market.

'Extreme measures'

Prices have fallen in many parts of the UK in the past few months, prompting some analysts to question whether the decade-long housing boom is coming to an end.

In order to gauge how record house prices were affecting people's lives, the BBC commissioned NOP to conduct research on the issue at the end of last month.

Asked which they thought was a safer investment at the moment, 53% of those surveyed said buying property was safer than cash.

That belief is directly at odds with the view accepted by the overwhelming majority of investment professionals.

They regard cash as safer than property because as long as the bank is solvent, there is no risk to your capital.

It will also raise questions about the success of the government's attempts to reassure the public following the run on Northern Rock.

The programme also discovered that first-time buyers, fearing the first rung of the property ladder is drifting out of reach, are taking extreme steps to obtain a property.

Such steps included:

• Going to Bulgaria to buy despite warnings of an oversupply of property in Eastern Europe which could bring prices down there

   

• Queuing all summer in tents for old army houses

   

• Finding a friend to buy with using the internet

   

• Buying a boat to house a family because normal housing is unaffordable even when people earn well over the average income

Courtesy BBC October 2007