This article by Rupert Jones of theguardian on September 23th, 2013 states that borrowers with tracker mortgages will see their rate rise by two percentage points.
Thousands of customers holding buy-to-let mortgages with West Bromwich building society will see their monthly costs rise sharply after the terms of their deals were changed.
Angry
borrowers are already pledging to fight the move after it emerged that
about 6,700 customers will be hit by the society's decision to increase
their interest rates by two percentage points on 1 December. This is
despite the fact that the Bank of England base rate, which these
mortgage deals track, has been at 0.5% since March 2009 and seems
unlikely to rise for at least two years.
Some of those affected –
for example, those currently paying a rate of 1.49% – will see their
mortgage rate more than double at a stroke.
The change follows a similar move earlier this year involving 13,500 Bank of Ireland UK customers, which prompted an outcry and later led to the bank cutting the numbers of people affected.
The
West Bromwich said the 6,700 borrowers were all BTL landlords with
mortgages that track the base rate. The affected customers took out
their deals from early 2006 onwards and are on a variety of different
interest rates. They all signed up with the West Bromwich Mortgage
Company, a division of the building society.
A spokesman for the society said: "The West Bromwich has advised a
number of BTL borrowers who have tracker mortgage accounts with the West
Bromwich Mortgage Company that their rates of interest will be
increasing by 2% from 1 December 2013. All borrowers affected are
landlords of multiple property portfolios.
"These
changes, which are permitted under the terms and conditions of the
accounts, are a reflection of market conditions and the need for us to
carry out our business prudently, efficiently and competitively."
Customers have already started to post comments on websites. On the Property118 website
Gavin Ewan said: "I will be phoning them on Monday to complain, as
there is nothing in my acceptance of offer suggesting that they can
increase it. Basically it is a tracker BOE [Bank of England] base rate
+0.99%, ie 1.49% until the term end (25 years from November 2006)."
He added: "I expect there are going to be a lot of very unhappy people."
Another, Shaun McAllister, said: "I shall be fighting them all the way."
In
February 2013, Bank of Ireland prompted fury after revealing it was
triggering a "special condition" clause in loan agreements that allowed
it to increase the "interest rate differential" on some of its UK base
rate tracker mortgages.
The changes would have affected about 13,500 residential and BTL customers. However, in May the bank wrote to 1,200 of the borrowers to advise them they would not face the rise in payments after all, following a review of customer complaints.
Article Source: http://www.theguardian.com/money/2013/sep/23/west-bromwich-interest-rates-buy-to-let-mortgage
Showing posts with label borrowers. Show all posts
Showing posts with label borrowers. Show all posts
Tuesday, 24 September 2013
Thursday, 19 September 2013
Chelsea Beats HSBC to be Top for First-Time Buyers
Chelsea is now top on the list when in comes to two-year mortgage rates catering first-time buyers as revealed on this article by lovelymoney.com on September 18th, 2013.
Chelsea Building Society has launched a market-leading two-year fixed rate mortgage for first-time buyers.
Borrowers with a 10% deposit can apply for the deal, which comes with a fixed rate of 3.54% for two years and a one-off fee of £1,545.
The new offer from Chelsea shoves HSBC from the top spot for two-year fixed rates on 90% loan-to-value deals – making a mockery of a price promise the bank pledged just a couple of weeks ago.
Flawed price promise
The HSBC price promise is a guarantee to be 'first for first-time buyers' on three of its 90% LTV deals.
The deals include a two-year fixed rate at 3.59%, a five-year fixed rate at 4.39% and a lifetime tracker rate of 3.99% (base rate plus 3.49%). Each of the offers come with a £999 fee if you have a HSBC current account, otherwise you will have to fork out £1,499.
HSBC said it would automatically beat or match providers that offered a better rate elsewhere between 2nd September and 3rd November 2013.
But this bold claim comes with an important catch.
The HSBC price promise will only beat or match rates on offer from Barclays, Woolwich, Halifax, Lloyds TSB, Nationwide, NatWest, Royal Bank of Scotland and Santander.
HSBC says these providers represent 81% of the UK mortgage market.
This means that HSBC will be able to match or beat four out of five providers on the price of 90% LTV mortgages, but not all of them, as the latest move from Chelsea Building Society has highlighted.
HSBC vs. the 19%
The eight providers HSBC challenged have so far failed to set the mortgage world alight with counter offers that might put the price promise on HSBC's leading deals to the test.
Only Chelsea Building Society, part of the 19% of providers HSBC's guarantee doesn't cover, has brought out a challenger rate that is just 0.05% lower.
Elsewhere Nottingham Building Society has launched a rate of 4.39%, fixed for five years with a low fee of £299, which matches the rate on offer from HSBC's five-year fixed rate.
The HSBC deals have only been challenged by lenders it discounted, a flaw in an otherwise bold offer.
HSBC said it had no immediate plans to extend the promise to the many building societies excluded from the guarantee, which is a shame as things could really get interesting if they were.
Punching above their weight
Last year building societies increased gross lending by 30% to £31 billion. This gave the sector a 22% share of the mortgage market, compared to 17% the year before. This year building societies are on track to go even further, with the latest figures pointing towards a 24% market share.
It's clear to see that building societies are punching above their weight and giving the big banks a run for their money.
Apart from Chelsea and Nottingham Building Society presenting a challenge to HSBC's claim, Norwich and Peterborough has recently launched a market-leading rate of 1.99% to borrowers with a 35% deposit, while Leeds Building Society has come out with innovative 0%-interest mortgages.
Supporters of building societies always point out that they are run in the interest of their members rather than shareholders, so this is where the flexibility comes from. But the lower rates have almost certainly been spurred on by the Government's Funding for Lending Scheme.
This has given lenders access to cheap funding, which they have passed on to mortgages borrowers in the form of record-breaking low rates.
Now building societies like Chelsea are coming to represent a real threat to the big banks.
First time buyer mortgages
Don't discount the other 19% of lenders out there like HSBC has. Make sure you shop around for the best deal on a mortgage. You can visit our mortgage centre.
There are also deals like Help to Buy and New Buy which have been designed to assist first time buyers onto the property ladder.
Article Source: http://money.aol.co.uk/2013/09/18/chelsea-beats-hsbc-to-be-top-for-first-time-buyers/
Chelsea Building Society has launched a market-leading two-year fixed rate mortgage for first-time buyers.
Borrowers with a 10% deposit can apply for the deal, which comes with a fixed rate of 3.54% for two years and a one-off fee of £1,545.
The new offer from Chelsea shoves HSBC from the top spot for two-year fixed rates on 90% loan-to-value deals – making a mockery of a price promise the bank pledged just a couple of weeks ago.
Flawed price promise
The HSBC price promise is a guarantee to be 'first for first-time buyers' on three of its 90% LTV deals.
The deals include a two-year fixed rate at 3.59%, a five-year fixed rate at 4.39% and a lifetime tracker rate of 3.99% (base rate plus 3.49%). Each of the offers come with a £999 fee if you have a HSBC current account, otherwise you will have to fork out £1,499.
HSBC said it would automatically beat or match providers that offered a better rate elsewhere between 2nd September and 3rd November 2013.
But this bold claim comes with an important catch.
The HSBC price promise will only beat or match rates on offer from Barclays, Woolwich, Halifax, Lloyds TSB, Nationwide, NatWest, Royal Bank of Scotland and Santander.
HSBC says these providers represent 81% of the UK mortgage market.
This means that HSBC will be able to match or beat four out of five providers on the price of 90% LTV mortgages, but not all of them, as the latest move from Chelsea Building Society has highlighted.
HSBC vs. the 19%
The eight providers HSBC challenged have so far failed to set the mortgage world alight with counter offers that might put the price promise on HSBC's leading deals to the test.
Only Chelsea Building Society, part of the 19% of providers HSBC's guarantee doesn't cover, has brought out a challenger rate that is just 0.05% lower.
Elsewhere Nottingham Building Society has launched a rate of 4.39%, fixed for five years with a low fee of £299, which matches the rate on offer from HSBC's five-year fixed rate.
The HSBC deals have only been challenged by lenders it discounted, a flaw in an otherwise bold offer.
HSBC said it had no immediate plans to extend the promise to the many building societies excluded from the guarantee, which is a shame as things could really get interesting if they were.
Punching above their weight
Last year building societies increased gross lending by 30% to £31 billion. This gave the sector a 22% share of the mortgage market, compared to 17% the year before. This year building societies are on track to go even further, with the latest figures pointing towards a 24% market share.
It's clear to see that building societies are punching above their weight and giving the big banks a run for their money.
Apart from Chelsea and Nottingham Building Society presenting a challenge to HSBC's claim, Norwich and Peterborough has recently launched a market-leading rate of 1.99% to borrowers with a 35% deposit, while Leeds Building Society has come out with innovative 0%-interest mortgages.
Supporters of building societies always point out that they are run in the interest of their members rather than shareholders, so this is where the flexibility comes from. But the lower rates have almost certainly been spurred on by the Government's Funding for Lending Scheme.
This has given lenders access to cheap funding, which they have passed on to mortgages borrowers in the form of record-breaking low rates.
Now building societies like Chelsea are coming to represent a real threat to the big banks.
First time buyer mortgages
Don't discount the other 19% of lenders out there like HSBC has. Make sure you shop around for the best deal on a mortgage. You can visit our mortgage centre.
There are also deals like Help to Buy and New Buy which have been designed to assist first time buyers onto the property ladder.
Article Source: http://money.aol.co.uk/2013/09/18/chelsea-beats-hsbc-to-be-top-for-first-time-buyers/
Wednesday, 4 September 2013
Lenders in the UK Confident That Stress Tests Will Not Bar Most Mortgage Applicants
According to the research by the Intermediary Mortgage Lenders
Association intermediary mortgage lenders in the UK are ensured that new
affordability checks resulting from the MMR will not significantly
reduce the number of people who successfully apply for a mortgage as
shown in this recent article by the Property Wire on September 3rd,
2013.
Research by the Intermediary Mortgage Lenders Association found just 7% of intermediary lenders expect significantly more people will be turned down for a mortgage because of new stress tests, which will examine whether borrowers could afford their repayments in the event of interest rates rising.
IMLA’s Intermediary Lending Outlook shows that almost three quarters of lenders are confident that affordability checks will not impact borrowers in large numbers while the remaining 20% are unsure.
Overall responsibility for affordability checks will officially pass from brokers to lenders when the MMR takes effect in April 2014. While many of its provisions are already standard practice for lenders, mortgage brokers are less convinced that aspiring borrowers will be unaffected.
Although 34% of brokers do not expect stress tests will significantly reduce the number of successful mortgage applicants, some 44% predict that considerably more consumers will find they are turned down.
However, brokers are significantly more confident about the impact of the MMR than they were at the start of the year. Some 66% are not at all worried in August 2013, compared with 42% in January 2013, and the percentage with significant worries has dropped from 12% to 4%.
In contrast, 67% of lenders are currently worried about the impact of MMR but despite their extra responsibilities under the new rules, no lender has serious concerns.
‘The MMR rules on affordability are built on common sense and are not too far removed from how many lenders already approach the issue. Recent experience has shown how important it is to ensure that mortgage borrowers can reasonably manage their commitments, not just now but in the future,’ said Peter Williams, executive director of the IMLA.
‘We are in unfamiliar territory when it comes to current interest rates, so we have to be pragmatic and anticipate the likelihood of change. Falling numbers of arrears and repossessions in recent years show a responsible approach to mortgage approvals, and lenders are working hard to ensure their existing tests meet the full MMR requirements without unfairly disadvantaging consumers,’ he explained.
‘Although the regulatory buck will rest with lenders from April 2014 there is still a collective responsibility to put affordability at the heart of the industry. This involves brokers working closely with lenders to help finalise the rules of engagement, while also ensuring that customer expectations are managed and applications suitably vetted,’ he added.
Article Source: http://www.propertywire.com/news/europe/lenders-uk-mortgage-review-201309038187.html
Research by the Intermediary Mortgage Lenders Association found just 7% of intermediary lenders expect significantly more people will be turned down for a mortgage because of new stress tests, which will examine whether borrowers could afford their repayments in the event of interest rates rising.
IMLA’s Intermediary Lending Outlook shows that almost three quarters of lenders are confident that affordability checks will not impact borrowers in large numbers while the remaining 20% are unsure.
Overall responsibility for affordability checks will officially pass from brokers to lenders when the MMR takes effect in April 2014. While many of its provisions are already standard practice for lenders, mortgage brokers are less convinced that aspiring borrowers will be unaffected.
Although 34% of brokers do not expect stress tests will significantly reduce the number of successful mortgage applicants, some 44% predict that considerably more consumers will find they are turned down.
However, brokers are significantly more confident about the impact of the MMR than they were at the start of the year. Some 66% are not at all worried in August 2013, compared with 42% in January 2013, and the percentage with significant worries has dropped from 12% to 4%.
In contrast, 67% of lenders are currently worried about the impact of MMR but despite their extra responsibilities under the new rules, no lender has serious concerns.
‘The MMR rules on affordability are built on common sense and are not too far removed from how many lenders already approach the issue. Recent experience has shown how important it is to ensure that mortgage borrowers can reasonably manage their commitments, not just now but in the future,’ said Peter Williams, executive director of the IMLA.
‘We are in unfamiliar territory when it comes to current interest rates, so we have to be pragmatic and anticipate the likelihood of change. Falling numbers of arrears and repossessions in recent years show a responsible approach to mortgage approvals, and lenders are working hard to ensure their existing tests meet the full MMR requirements without unfairly disadvantaging consumers,’ he explained.
‘Although the regulatory buck will rest with lenders from April 2014 there is still a collective responsibility to put affordability at the heart of the industry. This involves brokers working closely with lenders to help finalise the rules of engagement, while also ensuring that customer expectations are managed and applications suitably vetted,’ he added.
Article Source: http://www.propertywire.com/news/europe/lenders-uk-mortgage-review-201309038187.html
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