- Types of Mortgage Explained
- Which Mortgage Type Is Right For Me?
- Mortgage Repayment Guide
- Remortgage Guide
- First Time Buyer Mortgages
- House Price Comparison
- How Much Can I Borrow
- Joint Ownership
Specialist UK Mortgages...
One week on and the base rate shock continues
One week on from the shock base rate rise to 5.25%, Lisa Taylor analyst at moneyfacts.co.uk comments on the changes seen so far in the mortgage and savings markets.
Savings
“Again the savings market has been traditionally slow to react, with only 28 savings providers announcing changes to some or all of their savings range, and so far only 18 applying the higher rates to their whole product range.
“The fact that almost every company so far has passed on the full quarter point rise is a sign of the competitive nature of the savings market. But with over 75% of providers yet to make an announcement, consumers should perhaps wait a while before shopping around for a new savings account.
“As inflation hits an 11 year high at 3%, it is vital that consumers protect their savings from these inflationary pressures. The average no notice savings rate today on a £5K deposit is only 3.421%, so alarmingly many consumers have their savings in accounts which in the long term will depreciate in real terms.
“Although not directly linked to the base rate rise, the surprise increase will have a knock on effect on the fixed rate market, as swap rates climbed over the last week. On Wednesday we saw the fixed rate market hit over 6%, with the launch of the Birmingham Midshires 1 year bond, paying 6.05%. While the rate is currently very competitive, the market does predict a rate rise this year which could result in us seeing many more deals fixed rates hitting 6% or even higher.”
Mortgages
“Similarly mortgage lenders have been slow to amend their SVR rates, with around 100 still to announce. Unsurprisingly all bar two of the increases so far has been for the full 0.25%. The exceptions are Harpenden BS, which opted for a 0.20% rise on both its mortgage rate and savings. And Chorley & District BS increasing its SVR by 0.35%.
“The surprise of this rate rise, and the compound effect of the three rises so close together has made little difference to how the lenders have reacted in terms of increasing their SVR and tracker products. The effects of January’s rise resembles that of August, the last unexpected rise, where fixed rates were the first to be impacted.
“As reported earlier this week, around 15 provides withdrew their fixed rate products completely, with many more replacing their range with often higher priced products. Portman, for example, withdrew its 4.99% two year best buy fixed rate, only to replace it the next day at 5.34%, a 0.35% rise.
“This rise could be particularly painful for anyone coming off a two year deal hoping to remain on a new fixed rate. Two years ago, one the of best deals available was at 4.47% with a fee of £399; today a similar deal with Portman BS would be 5.34%, a 0.87% difference. For an average repayment mortgage of £150K (over 25 years), this would mean you would have to find an extra £74 a month.
“Not only have we seen fixed rates increasing, some lender are combining this with fee increases, while other are using increased fees and keeping the rate unchanged. Examples include:
Lender |
Changes to fees |
Abbey |
Selected 2 year fixed rates – fees increased by £200 to £999. |
Bristol & West Mortgages |
No longer any fee free products |
Nationwide |
2 year fixed rate – fees increased by £100 to £899. |
Northern Rock |
Fees of £895 and £1195 increased by £100. |
“So with demand for fixed rates in some cases outstripping demand, swap rates rising and predictions of a further rate rise due shortly, it won’t be long before we see the demise of fixed rate deals below 5%.”
“These are the best fixed rate deals still available:
Company |
Rate |
Period |
Max |
Fee |
Redemption |
Chelsea BS |
4.99% |
to 1.3.09 |
95% |
£695 |
To 1.3.09 |
Bradford & Bingley |
4.99% |
to 31.1.09 |
95% |
£699 |
To 31.1.09 |
Cheshire BS |
5.15% |
to 30.11.09 |
95% |
£449 |
To 30.11.09 |
Alliance & Leicester |
5.19% |
to 31.1.10 |
95% |
£599 |
To 31.1.10 |
Leeds BS |
5.24% |
to 31.1.12 |
95% |
£599 |
To 31.1.12 |
Marsden BS |
5.09% |
to 31.1.17 |
90% |
£499 |
To 31.1.17 |
Source: www.moneyfacts.co.uk Date Compiled: 19 January 2007
NOTES TO EDITORS:
Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.
We can supply you with regular weekly or one-off selection charts on many financial products including savings, mortgages, credit cards and personal loans. Our charts are independent, impartial, totally accurate and up to date.
Please call Andrew Hagger on 0870 2250 512 for further information
Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.
Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd.
Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales Company 5703224. FCA Number 456600
We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £349