AToM Mortgage Blog

Mortgages - an interesting world! Gross mortgage lending is quoted to be up 12.5% year on year. Product offerings are increasing. Moneysupermarket.com indicates 384 products are available to those looking for an 85% loan and 165 for those looking for 90%. The UK is officially ‘out’ of recession! Superb news, so perhaps confidence will start to return in the mortgage sector now?
One point of concern surrounds the activities of some mortgage lenders and their reversion interest rates (rates which apply at the end of an incentive rate period). It appears that, despite mortgages being sold with a quoted interest rate ‘ceiling’ at the end of the incentive term, there may be options in the lenders small print allowing increases above this, and at no notice!
One lender which appears to have made such an increase is Skipton Building Society. Their offers ‘allegedly’ quoted a ceiling of 3% above the Bank of England Base Rate. Their new SVR (from March) will be 4.95%, an increase of 1.45%. This is blamed on “exceptional market conditions”! Ouch! Skipton’s actions have suffered the wrath of the national press and now the floodgates are open for others to follow if they have similar ‘get out’ clauses in their mortgage offers. Nationwide have increased some SVRS through their specialist arms UCB Homeloans (0.30%) and The Mortgage Works (0.50%) respectively. Two smaller lenders have announced a 0.35% increase from February.
What does this mean for you? Check carefully the details of your original mortgage offer. If the reversion rate is the lenders SVR, then it’s likely this will be increasing shortly. If it is a Bank Base Rate Tracker then you are likely to move onto an attractive reduced rate, at least for a while! Whichever, it is a good time to review your contract paying specific attention to the sections relating to reversion rates.
The re-mortgage market is reviving and it is a good time to review the market to see what’s available to you. Lenders seem to display little or no loyalty to you, so you have no moral obligation to them. There are plenty of lenders willing to compete for your business. Call AToM for a no obligation review.

Labels: all types of mortgages, lenders, mortgages, remortgage