UK Mortgages Direct - 0870 4130 345

Abbey is cutting rates on all of its fixed rate mortgage  deals today at 60 % and 75 % LTV.

The rate cut will put  Abbey at the top of the best buy tables on all two, three and five year fixed rate mortgages at 75 % LTV and below.

Two and three-year 60 % LTV deals were cut by 0.25 per cent - both are now 5.49 per cent with £499 fee

Two-year fixed rate mortgage deals at 75 % LTV were cut by 0.35 per cent - now start from 5.54 per cent with £995 fee

Three-year fixed rate deals at 75 % LTV cut by 0.30 per cent - now start from 5.54 per cent with £995 fee

Five-year fixed rate mortgages at 75 % LTV cut by 0.25 per cent - now start from 5.54 per cent with £995 fee

New five-year fix at 60% LTV added to the range - 5.49 per cent with £499 fee

Also  Abbey are holding their competitive tracker rates, and have increased the maximum loan size on our two-year tracker and fixed deals at 60 per cent LTV to £550,000.

Nici Audhlam Gardiner, Director of Abbey Mortgages, commented: “Despite the challenging market conditions our mortgage business has gone from strength to strength as our results showed earlier in the week. This is in large part down to our competitive deals. This week we’re cutting rates further on our most popular two, three and five-year fixed rate deals by up to 0.35 per cent.”

When he was Speaking from the  University of Kent Blanchflower warned that a lack of d action on interest rates will mean the impending recession will be even longer.He stated, “My view remains that interest rates do need to come down significantly – and quickly. If rates are not cut aggressively we do face the prospect of a relatively deep and long lasting recession.
“Certainly the scale of the problems in financial markets has been rather worrying. As house prices have fallen LTVs on existing mortgages have deteriorated, putting significant proportions of the population into negative equity.”

Blanchflower says the cut in rates should be made before next Thursday’s MPC meeting as the turmoil is pushing banks to restrict lending further.

He adds: “I believe the impact of constrained credit conditions has yet to fully feed through to the broader real economy, particularly on firms’ investment decisions.

“Recent events in financial markets will likely reduce lending further to both households and firms in the near term. This is a key factor underpinning my view that we need a looser monetary policy in the UK.”

No banks have collapsed for over a month and interest rates look set to come down next Thursday  so are cheaper mortgages just around the corner? Sadly not.

A few fixed-rate mortgages came down in response to the  recent base-rate cut, but tracker mortgages - the mortgages of choice during times of falling interest rates - are more expensive than they were this time last year, when the Bank of England base rate was 1.25 % higher than the current rate, of 4.5 per cent.

Last October the average rate on a tracker mortgage stood at 6.23 per cent, compared to 6.27% now, according to Moneyfacts.co.uk. Michelle Slade, one of its analysts, says: “Lenders are just not passing on cuts. They are factoring in a much bigger margin for risk than ever before and as a result mortgage rates remain high.”

The last time that the base rate was 4.5percent, borrowers could have obtained a rate of 4.25 per cent on a two-year tracker. Today the best rate on offer is 5.99percent. More than 30per cent of applications for loans worth more than 75percent are being declined by LloydsTSB, often because small details, such as a home phone number, have not been filled out. Such is the paranoia of banks.

Restrictions are becoming harsher still. Cheltenham&Gloucester has introduced a new fee for borrowers who want to move and rent out their homes by converting their mortgage into a buy-to-let loan. The wait for respite continues.

The amount of mortgages available for people with only a 5% deposit have taken a nose dive this week by nearly 50% in the last 7 days.

There are now just 40 mortgages available for people borrowing up to 95% of their home’s value, down from 75 last week  a fall of 47%.

There has also been a steep decline in the number of 90% mortgages on the market, with these falling from 324 last week to  261 this week  according to Moneyfacts.co.uk.

The latest figures suggest that lenders are tightening their lending criteria again, despite the recent help that has been offered to the sector by the Government. Lloyds TSB, which also lends under the Cheltenham & Gloucester brand, has been among those lenders pulling their 90% deals.

They announced that they were pulling their two-year fixed rate deals for people with a 10% deposit, replacing them with ones that now demand at least a 15% one. It is also limiting the loan to value ratio it will advance to people looking to borrow additional sums to 80%.

Lenders  have been safe guarding themselves by demanding increasingly higher deposits since the credit crunch first struck, the number of 95% deals that are available has  tumbled from 1,079 in July last year to just 40 now.

Mortgage rates also remain high, despite the recent drop in the Bank of England base rate. So far only 43 out of 96 lenders with a standard variable rate have announced whether or not they plan to pass on the cut to their mortgage customers.

Among those who have announced their intentions, many are failing to pass on the reduction in full, with HSBC saying it will not be cutting its SVR at all, while Abbey and Northern Rock are reducing theirs by only 0.15%.

Tracker rate mortgages for new customers are at the same level they were at this time last year, despite interest rates falling by 1.25% during the period.

The average interest rate on a new tracker mortgage was 6.23%, or 0.48% above the Bank of England base rate, in October last year. It is currently 6.27% or 1.77% above the base rate.

Legal and General (L&G) has entered into a new partnership with the Money Portal (MP) to help make its mortgages more widely available.

Read the rest of this entry »

September saw a huge increase in the number of property investors taking out buy to let mortgages.

According to our survey, there was over a 57% rise in buy to let mortgage applications last month, the biggest increase for over a year. Read the rest of this entry »

The average price of a new home fell for the fourth consecutive month in September.

Read the rest of this entry »

Two weeks after the Bank of England announced a 0.5% cut to the Base Rate, more than three quarters of all UK mortgage lenders have yet to pass on this reduction to their standard variable rate mortgage customers.

With mortgage approvals falling to rock bottom levels and house values continuing to fal, it is unlikely that mortgage lenders will lend at reasonable levels in the short term. Unfortunately, within this increasing downward spiral, the majority of customers currently have no alternative but to switch to their lender’s standard variable rate (SVR).

Read the rest of this entry »

Buyers confidence appears to be on the increase with some buyers positive over lower house prices, reveals research Read the rest of this entry »

Mortgages offering up to 95% of a property’s value are needed to Liven up the market, according to experts. Read the rest of this entry »