loose change

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The Independent Online
Lenders tighten

mortgage grip

There is no such thing as a free cut-price mortgage. Well not yet anyway. As lenders struggle to kick-start the market with cheap fixed rate and discounted variable rate offers the borrower is faced with paying more further down the line.

Most cheap deals now lock the borrower in for an average of two years on the lender's standard rate. A two-year fixed-rate deal at 6.15 per cent from the Halifax now forces the borrower to stay a further three years on its 8.35 per cent standard rate. And the penalty for pulling out has risen to 5pc of the mortgage.

What they mean when they say ... 'Rolling settlement'

Rolling settlement is the term used to describe the system through which money changes hands when buying and selling shares on the Stock Exchange. Last year it replaced the traditonal two-week dealing period known as "the account''. But on Monday the Exchange is switching to a rolling settlement system called T+5 (trade plus five days). This gives investors just five working days to settle trades instead of 10.

In theory a failure to pay for shares within five days could result in the trade being cancelled and a fine. Most stockbrokers will allow their private clients a little longer. Late settlers, however, could be forced to pay more or accept less for a share. You could put shares in a "nominee account'' with your broker, who will deal with all the administration. But this comes at a price!

Overdraft costs

coming down

Things are looking up for the 25 million Britons who go overdrawn every month. An overdraft price war is about to break out. Barclays this week fired the opening shot by halving the cost of its authorised overdrafts to pounds 5 a month.

The move makes Barclays more competitive with the building societies, which have only ever charged interest on overdrafts.But building societies will still be much cheaper. Halifax levies an annual 12.4 per cent on authorised overdrafts, while Woolwich charges 9.5 per cent. Barclays charges 19.2 per cent, plus the pounds 5 levy.

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