Lack of awareness about mortgage rates amongst UK consumers

It has been claimed in a recent report that there is a severe lack of awareness amongst UK consumers when it comes to their mortgage interest rates. The data comes from a study that was carried out for the Consumer Financial Education Body, and involved polling over two thousand consumers about their mortgage interest rates.

The results of the study indicated that a massive three quarters of mortgage holders in the UK had no idea how an interest rate rise of 1 percent would affect their mortgage repayments and their budgets. The poll also found that many mortgage holders did not know what type of mortgage they had, and many also had no idea when their mortgage would expire.

The survey looked into a number of different mortgage related issues. The base interest rate has been kept on hold at its lowest level on record for sixteen months now, standing at just 0.5 percent. However, the survey results showed that over 50 percent of consumers thought that in the next nine months the base interest rate would increase.

Around 15 percent of those polled did not know what sort of mortgage product they had, such as a fixed, tracker, discounted, or standard variable rate mortgage. Around 8.6 million people out of 14.6 million had mortgages that formed part of a time limited deal. However, 15 percent of these mortgage holders did not know when their deals came to an end.

One industry official said: “Interest rates have been at record lows for some while now. Although there is uncertainty about when this will change, it is clear from our research that many people with mortgages have not thought about what it would mean for their monthly payments, or where they would find the extra money in their household budget if their mortgage rate was to go up. Lack of time means many of us often put off reviewing our finances.”

Tags: Mortgage loan, interest, finance, mortgage, deal

Increase in mortgage availability could spell good news for consumers

A recent report has indicated that the number of mortgages on offer to consumers could be on the increase, and access to these mortgage deals may be getting easier, even for first time buyers in some cases. Read more

Tags: uk lenders, lenders, access, Mortgage broker, mortgage, Subprime lending, Mortgage loan

Top spot in mobile broadband given to T-Mobile

As with any other service, consumers in the UK are looking for not only affordable prices but also great customer commitment and high quality when it comes to choosing a mobile broadband provider. Read more

Tags: upload, deal, upload speeds, mobile broadband, t-mobile, survey, service consumers

Increased popularity for cheaper fixed rate mortgages

Recently released figures have suggested that new lower fixed rate mortgages may be gaining popularity again, with borrowers keen to take up lower rate deals yet enjoy stable repayments for a fixed period of time to help them to budget more easily in the current difficult financial climate. Read more

Tags: fixed rate mortgages, bank, finance, Mortgages, deal, bank of england, council of mortgage lenders

Borrowers could get help from credit card firms

According to recent reports some consumers could get assistance from credit card companies if they are struggling with their credit card debt, as part of a package of proposed measures resulting from recent meetings between officials from the credit card industry and senior government officials. Concerns were raised about the situation in the credit card industry when reports showed that whilst the base rate had been plummeting over recent months credit card interest rates were still very high. Read more

Tags: Minister Gareth Thomas, card, Credit history, credit card help, rate, government officials, situation, deal

Did Darling know about the Icelandic bank collapse?

Earlier this month UK consumers were shocked after the collapse of Icelandic bank Landsbanki left many fearing for the savings that they had placed in UK branches of the bank. Many had been persuaded to put their cash in Icelandic accounts such as Icesave over the past couple of years due to the high rates of interest that were being offered. In fact Icesave spent a considerable amount of time at the top of the best buy tables because of the interest rates offered. Read more

Tags: banks, darling, Icelandic financial crisis, official, amount of time, iceland banks, uk, deal

Get a good deal on your savings from a British bank

There was a time not so long ago when consumers in the UK who wanted to get a good return on their savings were looking more towards foreign banks that had recently entered the UK market for savings accounts, as they were pretty sure that this is where the best interest rates would be found. They were not wrong, as a number of foreign banks have stormed into the UK savings account market over the past couple of years, and have stormed to the top of the best buy tables by offering impressive interest rates in a bid to attract customers and keep the competition at bay. Read more

Tags: interest, slump, competition, Financial institutions, Money market, housing slump, deal

Shop around for credit card bargains, customers urged

Credit card customers should be prepared to shop around for the best card deals this month, just as they would for anything else in the January sales.

According to Sainsbury’s Bank, credit card users need to take the new start offered by the New Year to review their finances and make sure they are getting the best deal.

“Look around and see whether there are better deals than what you’re currently getting from your provider and that may well offer you an opportunity to reassess your costs,” urged head of cards Donald MacLeod.

He urged customers to pay off more than the monthly minimum amount on their cards in order to avoid going further into debt.

Figures released by UK payments association Apacs last month suggested that 64.3 per cent of the £53 billion spent in the run up to Christmas would be put onto credit cards, with the amounts put onto plastic accelerating in the last few days.

Tags: New Year, apacs, deal, card, Christmas and holiday season, best card deals, finance, January

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: Business Finance, Gardiner, need, deal, emerged.Recent research

Young people attracted by saving

Young people are now twice as likely to open a savings account as they were just six months ago.

A new survey from Birmingham Midshires found that one in seven (14 per cent) 18 to 24-year-olds had opened a savings account in the last three months, compared to just one in fourteen at the time of its last study, six months ago.

More and more young people are seeing the benefits of saving, with interest rates high and banks and other savings providers competing fiercely to give the best deals.

Jason Robinson, director of savings operations at Birmingham Midshires said: “With 2007 widely accepted as the year of the saver, the savings market is not only appealing more to new markets – the younger generation – but we are also noting an increase in movement with more savers, particularly older savers – switching accounts to get a better deal. The trend is certainly moving away from inertia as people vote with their feet.”

The study found that more people, particularly over-55s, are willing to move their savings around to get a better deal.

However, other research out this week claimed that large numbers of savers are unaware of just how much interest they are actually earning.

Research from Sainsbury’s Bank found that around £112 billion nationwide is being held in account where the savers just do not know what rate they are on.

Tags: Youth, bank of england, inertia, savings operations, deal, Birmingham Midshires, best deals, six months

Consumers can enjoy new home insurance deal from bank

One of the nation’s leading building societies, the Nationwide, has recently launched a new home insurance package that offers a number of benefits to consumers.

Home insurance is a popular and important form of insurance cover, and is designed to protect consumers from the financial losses associated with their home and their belongings. Many people claim on their home insurance each year for anything from flood damage and accidental damage to theft or loss.

According to recent reports the Nationwide is offering a special deal where consumers can enjoy substantial savings when they sign up for home and contents insurance cover as a bundle package. Although these insurance types are available as separate products most insurance companies offer s discount to consumers taking both as a bundle, which enables the consumer to enjoy increased convenience and lower premiums.

Officials from the Nationwide have stated that consumers that opt for this new home insurance cover will be able to enjoy improved customer services and well as better cover. The cover can include unlimited cover on buildings cover and cover for items in the garden.

Consumers are advised to familiarise themselves with what the policy covers before they sign up, as this will enable them to check that the cover is suited to their needs before they make a commitment.

Nationwide is so confident about this insurance product that it if offering up to £100 refund on the difference of better cover can be found for the same premium elsewhere.

The cover offered by the building society will also cover students in the family that are living in student accommodations. Customers that pay by monthly instalments will not incur fees for the privilege of paying on a monthly basis.

Tom Smith
3rd November 2007

Tags: Insurance, deal, bank, home, cover

Homeowners urged to switch mortgages

Homeowners failing to look for a better deal on their expiring fixed rate mortgage could each stand to lose £2,600 if they stay on their provider’s standard variable rate (SVR) for two years, according to Moneysupermarket.com.

The price comparison website found that such mortgage “inertia” could end up costing British homeowners £5.9 billion a year, with an estimated one in five households stuck on an SVR mortgage.

Louise Cuming, head of mortgages at the website, said: “This shows how vital it is for homeowners to find the most competitive product when their fixed rate deal comes to an end.

“Providers have long played on the fact homeowners can be slow to react when their deal ends. Switching homeowners to an SVR increases bank and building society profits at our expense.”

Since the effects of the US sub-prime credit market crisis began to be felt by British banks and mortgage providers, many have begun to push up the rates on their tracker mortgages.

However, these rates are usually still much closer to the Bank of England base rate of 5.75 per cent than SVR rates, which currently stand at well above seven per cent on average.

Tags: deal, sub-prime credit market, SVR mortgage.Louise, average, GBP, homeowners, cuming, price comparison

Landlords rely on mortgage advisers

Landlords in the UK rely heavily on mortgage advisers when it comes to investing in a property.

That is according to the latest research from Alliance & Leicester which found that 74 per cent of landlords seek advice.

In total, 28 per cent admitted to relying on an adviser “a great deal”, while 46 per cent use them “a fair amount”.

The buy-to-let market is seemingly dominated by landlords who use an adviser, with 55 per cent admitting to relying on one to make them aware of new deals and arranging the actual mortgage.

“From our research, it is clear that advice plays an important part for buy-to-let investors,” said Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester.

“Landlords need their advisers to obtain information that they can’t easily get hold of themselves as well as helping them get the best mortgage product for their needs.

“The fact that half of landlords taking advice (49 per cent) remain loyal to one adviser shows just how much they really do value this relationship,” he added.

The research also found that over a third (40 per cent) of landlords meet with their mortgage broker every month, while nine per cent meet with them on a weekly basis.

Tags: month, landlords taking advice, mortgage advisers, weekly basis, landlord

Mortgage application fees on the rise

The fees charged for a mortgage application have almost doubled in the last three years, according to website Find.co.uk.

Figures, obtained by Defaqto, show that the average application fee for a fixed-rate mortgage now sits at £611, a massive increase on the £334 that was charged in February 2004.

The disparity between the highest and the lowest fees is also more pronounced in 2007 than it was in 2004.

Three years ago the cheapest was £149 from Darlington Building Society, while the most expensive was £2,5000 charged by Bank of Scotland Mortgages Direct.

In 2007 the smallest fee is £49, charged by Halifax, while the largest is £2,499 which is charged by Bank of Scotland.

Kate Marsden, marketing director at Find.co.uk, commented that those who are taking out a loan to buy a home need to do their homework first if they want to get the best deal.

“Borrowers need to do their sums to calculate the total cost of a mortgage, including all fees, so they can compare like with like when assessing different deals,” she said.

“After all, that upfront mortgage application fee could be your redecorating fund.”

If you are looking to get a mortgage make sure you shop around for the deal that is best suited to you.

Tags: Business Finance, deal, increase, massive increase, Find.co.uk.

Nationwide puts an end to ’same mortgage’ deal promise to its existing customers

Despite the fact that the UK’s fourth largest mortgage lender has run a very public and prolonged promotional campaign based around its promise of giving exactly the same deal to its existing mortgage customers as it does to first-time buyers, come 1 December the Nationwide’s existing 1.2 million mortgage customers will no longer be given such treatment.

In what many are seeing as incredible marketing blunder, the Nationwide has announced that with effect from the 1 December it will no longer continue to treat its existing UK mortgage customers the same as it does new ones.  Henceforth, existing mortgage customers who want to re-mortgage, switch to a better deal, or borrow against the equity in their homes will be faced with higher interest rates than customers looking to buy new homes.

Unlike its main rivals, the Nationwide has long prided itself on the fact that it will not discriminate against existing customers, but with the new rates coming into effect from 1 December, Nationwide customers wishing to re-mortgage, switch to better deals, or simply borrow more on their equity will now face the prospect of two-tier interest rates that range from 4.73% for house purchases to 5.88% for re-mortgages.

In its defence, the Nationwide are claiming that the change to their policy is in-line with the UK home lending market’s trend of offering “slightly better rates” for home-movers.  This may be so, but for a UK home mortgage lender that has built such a public image around its promise of offering the same service to both existing customers and new customers, Ray Boulger, senior technical manager at Charcol, the mortgage broker, says, “There’s no way you can legitimately claim you’re offering the same deals for everybody if your existing customers don’t have access to the cheaper purchase rates.”

If it is any consolation, existing Nationwide customers will be entitled to receive a £100 discount off the reservation fee if the decide to switch from one Nationwide home mortgage product to another, or if they elect to increase the amount of their UK mortgage loan.  Nationwide also agreed to waive its re-mortgage administration fee of £99 for existing customers who re-mortgage.

Nonetheless, as Melaine Bien, associate director of Savills Private Finance comments, although the changes allow Nationwide to “become more competitive with its pricing when attracting first-time buyers,” the promise that no-one would receive preferential treatment at the Nationwide “no loner stands”.

Tags: paymenst, time, forst, interest, Mortgages, offers

Contents And Buildings Insurance

What’s it worth?

The place where you live is probably the most valuable thing you own. But it’s not just its financial value that is important, the likelihood is if you have lived in one place for some years that it will be full of things you have collected that have sentimental value too. Read more

Tags: deal, television, cost, simple case, occasional occurrence, sentimental value, Sufficient cover, contents and building insurance