Clear signs are emerging of greater competition opening up amongst lenders, as Santander becomes the second within days to offer a record-breaking five-year fix at 2.99% – but so far, richer borrowers are the clear winners.
Like the earlier HSBC deal, Sandander’s 2.99% fix is available only for borrowers with a 40% deposit, squeezing out those without big deposits or who do not have plenty of equity in their existing homes.
It comes with the same hefty £1,499 fee, and is available only for existing customers of the bank. The HSBC deal is available to non-customers.
The 2.99% rate and 60% LTV maximum compares with Santander’s five-year fix at 3.89% at 70% LTV.
Elsewhere, the Government's new £80bn 'funding for lending' scheme also looks to be having an effect, after the announcement prompted a drop in wholesale borrowing costs – the scheme itself does not come into effect until August 1.
Cheltenham & Gloucester, Northern Rock and Principality all cut rates last week on some deals for new customers. Principality cut up to 0.6%, while Cheltenham & Gloucester and Northern Rock made cuts of up to 0.2%.
The Royal Bank of Scotland cut its five-year fix for first-time buyers with a 10% deposit by 1.7%, down to 4.79%, whilst Halifax has removed upfront fees on its two-year fix for customers who are remortgaging.
Santander has also launched two new intermediary deals, via Abbey for Intermediaries. One is a 2.99% three-year fix and the other a five-year fix at 3.49%, available for loans of up to £500,000.
Whilst the five-year fix is obviously higher than Santander’s direct-only 2.99% deal, it could attract those who do not fulfill the bank’s strict criteria – borrowers must already either have a Santander mortgage and be moving home, or must have had a current account with the bank for at least 30 days at the time of application.
Both products come with a £1,495 fee and with Abbey for Intermediaries’ homebuyer or remortgage solution.
Homebuyer includes a free standard mortgage valuation and £250 cashback, while the remortgage solution offers a free standard mortgage valuation, and either free legals or £250 cashback. Fees can be added to the loan and the maximum loan size on all products is £550K.
Santander's mortgage intermediary partners include Countrywide and LSL.
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Comments
Hey,
I have a couple of weeks at my mates gaff in Marbs with the Mrs and Kids, come back and Ive got my ‘troll’ back, aka Little Doggie, not so much a troll as a little pixie hopping about grinning like a demented fool doing little poos on my posts :0)
Not keen on me are you Little Pixie? although its a bit annoying it took you almost 24 hours to do you poo, you used to get on the case in less than an hour, why the slowdown?
Jonnie
Oh dear, see little Jonnie still desperate for attention, what a pointless post, good advice when you are boring dont try to be funny.
@rant
Just seen that in the BBC……………………..’it was the weather’, honest mate bankers said so
Jonnie
Latest mortgage data out today from the BBA - 29,500 loans in May, 26,000 in June, a drop of more than 10%.
375 billion of qe was a bank bailout...if they really wanted to help people they could have paid almost 1/3 off all mortgages and loans in the uk(1.5 trillion)
that would recapitalise the banks immediately and given people money in their pocket
the only reason they didn't is because they don't care about people...this is all about protecting the financials
give the people too much and they may well realise they have been had in the past
@Just to be on the safe side.. In my 20 or so years in the business, we have seen many 'death knells' tolling - but agents have an excellent ability to adapt - at least the ones who listen and learn do.
The others close. Its a property version of Darwinian selection. I agree that change is afoot - but in fairness that is nothing new. The rate of change has altered perhaps and that's where the more proactive of us succeed.
LondonAgent - The anonymous person at the start of responses is being a little naive - reposts of the death of agency has been omnipresent.
I agree we're far from dead but don't you think its a little 'naive' to totally ignore the underlying effect on our industry? Forget the sensationalism of the post but ignore the sentiment at our peril....
What idiots we are!
Banks HAVE got the money, OUR money (the government) loans it to them at less than 1%. Then OUR money is (sometimes) loaned back to US (say) at least 3% plus. However most of it is kept to "recapitalise" and pay themselves inflated wages and pensions. What a mess, but nice if you can get it!
Yeap it is another bank stealth bailout, yes they will pass so money along but increase their margin profits at the same time.
Borrowers Set To Cash In? More like the banks are set to cash in. They're getting this money from the Bank of England at something like 0.5% and lending it on at a minimum of 2.99%.
It's all part of a stealth plan to recapitalise the banks whilst pretending that it is for the benefit of others. Once the banks have been recapitalised, expect their forbearance towards the legions of overly-indebted homeowners (aka mortgage borrowers) out there to come to an end.
Dear LondonAgent, maybe in London you are OK for now, but your bubble will burst (ask Dave about Japan, lol).
Competition has nothing to do with it, any bank could have cleared up by offering an awesome mortgage product. If they don't have the funds, they don't have the funds, simple as.
Even if the banks want to be competitive they can't, because the banks that lend the banks money are going t*ts up as well (JP Morgan Chase).
And I don't really see how more Tesco stores is a good thing for retail outlets. Tesco ARE one of the reasons for the death of the retail outlet.
Yes, lets educate all those that are in negative equity that they should move house, lets educate all the FTB's that now is a great time to buy if you have a 40% deposit.
Dear anon
I prefer a head stuck in the clouds in prefernce to where yours is - not as dark
Oh dear, so many with their heads stuck in the clouds.
Once competition between lenders starts - it spreads across the market.
The anonymous person at the start of responses is being a little naive - reposts of the death of agency has been omnipresent.
There was also the repots of the death of retail outlets - yet the retail commercial sector is the single biggest growth area as Tesco et al are all trying to open more and more stores.
Positive news that lenders are reviewing their rates downwards.
Let's educate the public and let them know that there really has never been a better time to move and trade up!
Can the poster below please give the name of your firm so any potential customers can see that you are no differnt from an online agent and that you cant find applicants with at least a 10% deposit.
That's it, estate agents are f*&ked.
It's clear that reasonable mortgage rates aren't going to be available (particularly for FTB's) for a long time to come and with the slow but steady rise of online agents, I don't think there's going to be many of us left in a couple of years.
People with a 40% deposit don't need help with their mortgage, help the first time buyers!!!!!!!!!!!!!!!!!!!!!!!!
I hope you've all got a solid lettings business, if not, I would definitely start looking at other ways of generating revenue.
Just my opinion.