Money Insider: Lenders offer great rates on new mortgages
Saturday 30 July 2011
The number of new mortgage deals has really picked up during the past couple of weeks, with many lenders falling over themselves to offer ultra- low rates and innovative options to tempt consumers into taking out a new deal.
Yorkshire Building Society stormed to the top of the best buy tables with its five-year fixed-rate of only 3.49 per cent (£995 fee) up to 75 per cent LTV. It's rare to see a five-year deal at less than 4 per cent, but a sub 3.5 per cent rate is almost unheard of.
Capped rate mortgages have also started to return, with the latest offering from First Direct looking a good deal. The three-year mortgage is priced at base plus 2.58 per cent, so the current pay rate of 3.08 per cent works out at 1.24 per cent lower than the average three-year fixed rate. With many people predicting no rate rises for at least 12 months, this is an option worth exploring further. If you're in the market for a variable rate product, Woolwich mortgages from Barclays has cut its rates for the sixth time this year, with the lifetime tracker just trimmed by a further 0.19 per cent to 3.19 per cent with £999 fee for advances up to 80 per cent LTV.
Chelsea Building Society – part of the Yorkshire – has just launched a fixed-rate mortgage with a difference, priced at 3.99 per cent (to 70 per cent LTV) with a £195 fee and £500 cash back. This deal is unique in that the borrower has the flexibility to choose the term they wish to fix for, at either five, six or seven years.
In a more stable economic environment, borrowers would be snapping up many of these new rates in a flash. However, because household budgets are being squeezed and the risk of unemployment remains a real concern, the low take-up of new home loans is not really surprising.
The subdued level of demand for new mortgages is also surprising when you consider that it is now cheaper to buy than to rent in most parts of the UK. The problem is this situation is unlikely to change in the short term. High deposit requirements and the need for a whiter-than-white credit record leaves many people with no option but to continue to line their landlord's pockets every month.
This week Yorkshire Building Society announced it is to acquire the mortgage and savings books of Egg Banking from Citigroup, with the deal expected to be approved and completed by the end of this year.
The move will see the UK's second biggest mutual take on an additional 550,000 customers, bringing with them £2.5bn of savings balances and £430m worth of mortgages.
The acquisition of this sizeable new savings book looks a smart move, particularly as the cost of funding remains an issue for many building societies. The deal will enhance Yorkshire's funding position and enable one of the most competitive mortgage providers in the UK to expand its lending activities to a much wider audience.
As well as this latest move, Yorkshire BS has already tied up with Chelsea BS and Barnsley BS and is currently awaiting approval for a merger with Norwich & Peterborough BS. The UK desperately needs increased competition among financial services providers as consumers look for a trusted brand to deliver on both rates and service.
It's been a rocky few years for building societies, but Yorkshire BS is proving that the sector still has plenty of fight left in it and that it has the vision and determination to be a serious player on our high streets.
Andrew Hagger is a money analyst at Moneynet.co.uk
Get the best deal for your holiday cash
The kids breaking up from school is a sure sign that the summer holiday season is moving into overdrive.
With the pound down more than 7 per cent against the euro year-on-year, it means that millions of holidaymakers heading to the most popular eurozone destinations of Spain and France this summer will find they get a lot less than they probably realised. A family of four exchanging £1,000 will get 90 euros less than this time last year, a sterling equivalent of £82.
I've mentioned previously how important it is to check the charges levied by your credit and debit card provider for your plastic transactions overseas, but it's also worth getting the best deal for your foreign cash too.
For one of the most competitive deals for your holiday cash, take a look at www.travelex.co.uk, where you can order online and benefit from a Price Promise which guarantees you the best price foreign currency in the UK, or the difference refunded.
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
iJobs Money & Business
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
£20000 - £25000 per annum + OTE £35000: SThree: SThree are a global FTSE 250 b...
Day In a Page
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens