85% mortgages

Through the – well, do we call it a boom now? 100% mortgage and higher were commonplace and a ‘good’ deposit was 10% (the threshold where the better rates started appearing).

There were further thresholds at 15% deposit and 25% deposit and occasionally at 40% deposit, but that was unusual.

Since the crunch, 25% deposit has been pretty much essential and 40% good. Mortgages are available for those with smaller deposits, but at a premium.

C & G have been at the mainly 75% end of the scale for a while – but they are releasing products now at 85% range and a further set at the 90% range. They aren’t brilliant rates – above 6%, for the 90% products, but hey, it’s a start.

This is good – this could signal the start of competition for the low deposit end of the business and that is another sign of common sense starting to overcome panic in the mortgage market.

It also seems to be a signal that some people think the worst of the drop in house prices is over, and while it may not be totally bottomed out, it’s close enough for more lenders to take an interest in 90% lending.

100% mortgages – reports of their demise etc…

A couple of weeks ago I arranged a ‘rate swap’ for a client with Halifax – the client was with Halifax already and as their house had fallen in value a remortgage to a new lender was out of the question, so we looked at products the Halifax hasd to offer their existing customers.

I called them up – I needed to know if they revalued the house (it would be handy if they didn’t) but, they do, they have a computer that does it. I asked if they’d be OK with the remortgage as the maximum loan to value was 95% and the lady on the phane said they were OK up to 120% loan to value.

This is good – if a client is unlucky enough to have ended up in negative equity, they don’t need that luck compunding by being unable to get a decent mortgage rate.

Today The Coventry Building Society joined in – their existing borrowers can rate swap up to 100% loan to value.

These are both ‘common sense’ decisions – not risk decisions.

The lenders in question already have the liability, they are reducing risk by making the mortgage more affordable.

It’s good to see ‘proper thinking’ again – the panic of the last 18 months needs to abate and I hope this is a sign…

Lenders interest rates

Well, it seems that most lenders are doing the right thing on interest rates – 4.99% seems to be ‘about right’.

Abbey have influenced this, although we are all forgetting that they put their rates up by 0.5% earlier this week and also didn’t pass on the earlier 0.5% drop, so they had 1% in hand – obviously OK for them to drop the ‘full 1.5% to be fair to their customer’ Forgive me if I seem a bit cynical.

Looking back through by business register, I am pleased that many customers have tracker products, although if you look on a longer view I don’t think fixed rates will be all bad – there are going to be problems after the recession is averted over and they may be well be cured with higher interest rates.

And, in other news – I had a letter today from one of my credit cards saying they were going to put my interest rate up to something ridiculous. I was annoyed and threw away the letter. I then got very annoyed and got the letter to phone them and winge – I read the letter while I was on hold, it turns out that they were putting the interest rate wup within the terms of clause such and such and carried on like so for several paragraphs.

Tucked away in the final paragraph – “if you do not consent to this, please phone us within 30 days”.

Hmmm – wonder how many more of those letters I’ve missed over the years…