Half of mortgages now have percentage fees

It has been revealed that in the current difficult mortgage market around half of all mortgages now have percentage fees attached to them, according to a recent report. Read more

Tags: mortgage fees, half, spiral, mortgage percentage fees, mortgage focus, 49 percent, Mortgages, borrowers

Yorkshire bank seen increase in mortgage activity

It has been reported that the Yorkshire Bank has seen an increase in mortgage activity of late, with an increase in mortgage applications from interest parties as well as an increase in the number of mortgage applications that are being approved by the bank. Read more

Tags: May, Mortgages, income households, increase, mortgage applications, borrowers, low base

UK base interest rate falls to a new low

The base interest rate in the UK has fallen to a new low following the Monetary Policy Committee meeting in March. Following the meeting it was announced that the base interest rate was being cut once again, which was the sixth month in a row. Read more

Tags: glee, UK base, March, widespread glee, Student Loans Company

Warning on house prices from Nationwide

One of the UK’s major lenders, the Nationwide Building Society, recently sent out a stark warning with regards to house prices in the UK, painting a bleak and gloomy picture of what homeowners and the housing market in general has to face over the coming couple of years. Officials from the building society are expecting things to get markedly worse before they get better in the housing market. Read more

Tags: house prices, borrowers, halifax, value mortgages, price, principal focus, building society, nationwide

Drop in interest rates causes surprise for consumers

Struggling homeowners trying to cope with high mortgage repayments welcomed a surprise earlier this month after the Bank of England slashed the base rate by 1.5% just a month after applying a surprise 0.5% cut a day ahead of the scheduled Monetary Policy Committee meeting. The slash in interest rates has now taken the base rate down to just 3%. Just a year ago the base rate stood at 5.75%, so it is now nearly half of what it was a year ago. Read more

Tags: bank of england, order, borrowers, policy, CBI, Business Finance, chancellor, interest rates

Rate cut could benefit many homeowners

The latest interest rate cut, which was announced after the February 2008 Monetary Policy Committee meeting, could benefit many homeowners according to recent reports. This comes after nine out of the ten top mortgage providers in the UK announced that they would be passing on the full 0.25% rate cut to consumers. Many lenders rushed to announce their intention of passing on the full rate cut following the Bank of England’s announcement. Read more

Tags: mortgage, recent reports, variable rate mortgage, finance, mortgage repayments, borrowers

Uncapped mortgage charges ’skyrocketing’

The number of mortgages with uncapped upfront fees has risen dramatically in the past 12 months, it has emerged.

Now at 506, the number is five times what it was a year ago, with application fees rising as high as 3.25 per cent of the loan value, according to MoneyExpert.

Sean Gardner, chief executive of the website, commented: “Borrowers need to look carefully at mortgage deals and not just focus on the interest rate. What might look like a good deal will soon become a bad deal once fees are taken into account.

“Mortgage application fees are nothing new but lenders often won’t publicise a change to their fee structures, meaning some homeowners could be unaware of this huge shift to uncapped charges.”

Capped upfront fees have also gone up in the past year by an astonishing 63 per cent, with the average fee growing to £834 from £509 in November last year.

Mr Gardner concluded that those confused about fees should work out how much they are able to afford and then seek advice about whether the fees can be added onto the loan.

Tags: borrowers, United States, chief executive, executive, advice, fee

Brits choose ’stability’ when renewing mortgages

Millions of Brits would opt to fix their mortgage rate for five or more years if they needed to renew it, it has emerged.

Recent research by Abbey Mortgages has revealed that one in three (5.1 million) homeowners would choose a fixed rate of interest, with the need to know monthly outgoings the main reason for doing so.

The number of people wanting to opt for a five year fixed rate was greater even that the once favourite two-year fixes.

Head of mortgages at Abbey, Nici Audhlam-Gardiner, commented: “You never know what’s going to happen in the future, but at least if you’ve committed to a long term fixed deal, you know where you are going to stand with your repayments.

“Borrowers need to be sure however that the deal they take out is right for them and that they understand the different types of mortgages available before signing up to anything.”

Meanwhile, the number of homeowners choosing tracker mortgages was up to 12 per cent, although around eight per cent of respondents said they prefer to fix as they do not fully understand how tracker mortgages work.

Tags: Brits, 1 million, emerged.Recent research, need, borrowers, Business Finance, Gardiner, deal

Barclays offer reduced personal loan rates

Barclays bank has announced it will cut its personal loan rates when many lenders are having trouble maintaining current rates, according to Gary Druggan, managing director at Barclays Personal Loans.

Cutting rates on its entire book, the lending giant steps up competition in a move that takes advantage of its “strong balance sheet”.

The bank reports that Barclayloan Plus loan rates are going down by 0.6 per cent to 6.8 per cent APR typical.

Mr Duggan said: “At Barclays we are able to take advantage of a very strong balance sheet and finance loans from our very strong deposit taking business, enabling us to cut rates for this campaign.”

Personal loan rates have been just one of many things to be affected by recent credit crunch.

With many lenders forced to push rates up by as much as four per cent, borrowers would have trouble finding a rate below 6.9 per cent.

Mr Druggan added that anyone finding better loan rates than offered with Barclays will be refunded the difference and will also receive a bonus of one pound every month.

Tags: pound, borrowers, apr, difference, move, offer

Increasing consumer credit leading to more debt

The increasing availability of consumer credit which has caused the recent boom in the UK economy is contributing to rising levels of debt.

That is according to R3 (the Association of Business Recovery Professionals), which has suggested that various financial services have been “tripping over themselves to lend money”, which in turn has resulted in the inadequate checking of the suitability of borrowers.

Vice president Nick O’Reilly said that IVAs and indebtedness are on the increase because “the level of personal consumer debt in the UK has grown significantly over the last four to five years – in fact the main boom in the economy has been fuelled by personal consumer spending”.

He added: “Now that the level of borrowing is so much bigger in terms of trillions, the level of people with debt problems is obviously higher than it used to be.

“It’s a much more competitive financial services market these days, and people are tripping over themselves to lend money. That must mean, by its nature, that their credit checks are less rigorous than they used to be.”

Tags: recent boom, checking, borrowers, consumer debt, consumer spending, competitive financial services

Buy-to-let mortgage market affected by credit crunch

The UK’s buy-to-let mortgage market is being adversely affected by the recent credit crunch, according to a financial website.

Research from Moneyfacts.co.uk indicates that it is becoming increasingly difficult for potential property investors to obtain a buy-to-let mortgage as more and more lenders are raising the cost of taking out such a loan.

It is also thought that some lenders have decreased the number of products they have available for potential borrowers.

“The trend over recent years has been a falling rental income cover requirement, so with lenders reversing this trend, it’s a definite sign that some are taking a more cautious outlook,” commented Moneyfacts mortgage expert Julia Harris.

Nonetheless, she did note that while the buy-to-let market is “taking a battering at the moment” if you are prepared to look “there are still some very competitive deals to be found”.

“Perhaps lenders are just taking a breather, giving them time to evaluate the market and perhaps re-launch with re-priced products, which will more than likely be at a higher rate.”

Tags: launch, rate, market, property investors, outlook, borrowers, moment

Excess exit fees scrapped after consumer pressure

Excess exit fees for mortgage holders looking to switch, which had previously been levied by mortgage providers, are to be paid back, after consumer pressure and a ruling by the Financial Standards Authority (FSA).

Providers had presided over big increases in exit fees – with some doubling them in the last three years – for little extra cost incurred. This was seen as unfair by consumer groups.

The FSA, agreeing with customer complaints, had demanded that providers either justify the extra charges or return the difference, and set yesterday as a deadline.

Providers, after strongly resisting the ruling initially, have now decided to pay up on deadline day. Millions of customers will now get their money back.

Melanie Bien, at broker Savills Private Finance, told the Times that “Anyone who has remortgaged in the past few years… will be able to make a claim, depending on their lender’s stance.

“Lenders are concerned about the scale of claims they are likely to see regarding exit fees, which may be why borrowers will have to make a claim themselves, rather than wait to be contacted by their former lender”, she added.

Consumer groups will now look to their next battle, which will concern what are perceived as “excessive” overdraft charges from banks. A judgement from the Office of Fair Trading (OFT) is expected later this year.

Tags: Mortgage loan, Private Finance, battle, mortgage holders, exit, Mortgage-backed security, borrowers, customer complaints

Variable rate borrowers could be heading for a fall

Industry professionals are warning consumers that they could be heading for a fall if they have high levels of variable rate debts, from mortgages and secured loans to credit cards.

With four interest rate rises over the past year the Bank of England base rate has gone from 4.5 percent to 5.5 percent between last August and this May, and further interest rate rises have been predicted by experts before the year is out.

Many borrowers with variable rate loans and cards have seen their interest rates rise, and for many this has resulted in real financial difficulties when it comes to making repayments. Many consumers seem to have been banking on interest rates remaining stable in order to comfortably afford repayments on their borrowing, and the four interest rate rises since last August have really taken their toll.

The Governor of the Bank of England stated: ‘Anyone who borrows at a variable rate should recognise that the interest rate they will pay in the future may vary. It is unwise to borrow so much that the repayments are affordable only if interest rates remain at their initial levels.’

To many, this is something of a warning that further interest rates are indeed on the way, and those planning to take on more debt should be very careful as they may not be able to afford repayments should the interest rates continue to rise.

One economist stated: ‘Rates are going to go higher. A base rate of 6% is not necessarily the top. Borrowers should brace themselves for another increase. I would be surprised if base rate hit 7%, but not if it reached 6.5%.’

An official from the London School of Economics stated: ‘Base rate will peak towards the end of the year at or close to 6%. As long as inflation is under control, it could come down in a couple of years.’

Tom Smith
7th July 2007

Tags: increase, variable, borrowers, england, bank

No fees please

A new range of mortgages have been launched by a leading building society which come with absolutely no fees.

Yorkshire Building Society has announced the new range with the aim of simplifying the mortgage market for borrowers.

The firm is promoting its range as having no product fees, no legal fees, no standard valuation fee, no money transfer fee and no higher lending charge for re-mortgages.

The leading product in the range is a five-year fixed-rate mortgage at 5.89 per cent but the building society has a large number of deals on offer.

“There has been an inexorable rise in product fees in recent months, as lenders compete to get in to Best-Buy tables with headline rates,” said Yorkshire’s product development manager David Heshon.

“It has become increasingly difficult for customers to work out what the best deal is.

“With this new range of products what you see is what you get – a straightforward rate, with no additional up-front costs,” he added.

Borrowers, particularly those who are venturing into the property market for the first time, are finding it increasingly difficult to find a mortgage that best suits their needs so shopping around for deals such as this can be extremely beneficial.

Tags: Valuation, recent months, money transfer, fee, UK mortgage terminology, borrowers, product fees, valuation fee