Coutts Byers Private Finance - Market Review May 2008

Our mortgage specialists provide an overview of the current market for those seeking to arrange lending

As at the 7th May 2008 the latest news is that the credit crunch would appear to be with us for the next two years and that the Bank of England is looking at maintaining the present base rate of 5% to hold inflation.

In the past, mortgage rates have been directly related to the base rate which in turn was controlled by the government and more recently by the Bank of England. However, things have changed, and it would appear that lenders are now looking at their exposure in the market place. It is clear that as soon as a lender has a product that is seen as the best in the market i.e. good rate, free valuation / legal work etc, the lender becomes flooded with mortgage applications. The high workloads cause severe congestion and long delays in producing mortgage offers, subsequent panic steps in and within a few weeks the lender increases arrangement fees and rates to reduce workflow. The mortgage market moves to the next prime rate and causes havoc for them.

The problem with this scenario is that lending rates become very volatile.

We have illustrated below some of the best rates in the market place, however these are only correct at the time of writing and may be subject to change. Therefore it would be prudent to contact us to find out which rates are still available and which best suit your specific needs.

The good news is that lenders still want to lend, but the higher the risk i.e. the amount being lent in comparison to value of the property, the higher the fees and rates.

As of 7th May 2008 examples of mortgages available:

Best Residential Fixed rate (purchase or re mortgage)
5.59% fixed for 10 years, arrangement fee £995
Available up to 75% LTV
Early Repayment charge 5% to end of fixed rate (10% reduction allowed pr year)
Fee free deal, no valuation fee or solicitors fees for a re mortgage

Best Residential - Medium Term (re mortgage)
5.85% fixed either 3 or 5 years, arrangement fee £995
Available up to 75% LTV
Early Repayment charge 5% to end of fixed rate
Fee free deal as above

Best Buy to Let
Available up to 75% LTV 5.84% fixed for 2 years.
Arrangement fee 1.5%
Early Repayment charge 3% to end of fixed rate

Best Buy to Let
Available up to 85% LTV 6.79% fixed until May 2013, Arrangement fee £799
Early Repayment charge 5% up to end of fixed rate

Best Self Certification ( no proof of income required)
Available up to 70% LTV 6.13% fixed for 2 years, Arrangement fee 2.0%
Early Repayment charge 7% first year 6% second year

Coutts Private Finance is an introducer of business to The Mortgage and Finance Centre Limited which is an Appointed representative of Guaranteed Homeloans Network Services which is a trading style of Genesis Home Loans PLC and is authorised and regulated by the FSA.
Registered Office. The Coach House, 7 Mill Road, Canterbury, Kent, CT2 0AJ. Registered in England No. 5044247
YOUR HOME MAY BE REPOSSESED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Posted on 8 May 2008.
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