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

Competition is rearing its head in the mortgage market as lenders start to flex their muscles, lowering interest rates in order to attract volume business before the year ends. Both fixed and tracker product rates have been reduced of late. Base Rate Trackers seem to be back in favour with many as pundits predict that the Bank of England base rate will remain low throughout 2010 (at least) with rises predicted at some point in 2011. Many re-mortgage deals are now being offered with free valuations and free legal costs. Although purchases continue to outstrip re-mortgages by some margin, this might be a good time to consider a re-mortgage bargain in the run up to Christmas with little or no cost involved to change lenders. With product availability on the increase, it’s certainly a time to review all the options and speak to an independent mortgage brokerage to ensure you don’t miss out on the right product. They may not be around for too long in this still fragile market!
October saw a 0.4% rise in average property prices - according to Nationwide – the sixth consecutive monthly increase, taking the value of an average home to £162,038. However the society warned that the pace of monthly increase is slowing and this aligns to other predictions that the first quarter 2010 may prove to be static or possibly even deliver a decreasing house price market.
So, having encouraged banks to get together, and funded them with billions of our hard earned cash, HMG is now looking to break them up! Not only that, but they are going to give them another huge chunk of cash too! How does that work? Well, apparently this edict is from our European masters who have decided that perhaps our banks are too large! I may have a simple outlook, but is this not what many of us said at the time worrying that there was a great danger that too few banks would have too great a control? Its beggars belief that we would willfully waste such large sums of money in such a short period of time and all at the expense of the UK taxpayer! Or is it just me?

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