Great Escape Mortgage Offers Great Savings

Barclays, who recently celebrated hitting £100 billion in mortgage lending has launched a new product for borrowers on the standard variable rate (SVR).

At the start of the month, Barclays mortgage brand Woolwich celebrated increasing its mortgage holding by almost 50%. Over the past three years they increased their holding from £56 billion to around £100 billion in home loans.

The celebrated hitting the landmark £100 billion by slashing its interest rates on one of its tracker mortgages by 0.41%. Following the cut, their 70 percent loan to value (LTV) mortgage is now priced at 2.08% plus base rate so with the Bank of England rate so low at 0.5%, borrowers would be expected to pay 2.58% so long as they had the 30 percent deposit. The 75 percent loan to value (LTV) was also cut to 2.39% plus the 0.5% base rate. Barclays have followed this up by Launching their new mortgage aimed at those on the standard variable rate (SVR).

The new product which Barclay’s have called ‘the great escape’ taken from the world war two film with the same name, is aimed at those with at least 30% equity in their home. Those that qualify are able to get a life time tracker mortgage at 2.18% above base rate. With the Bank of England base rate currently at 0.5%, the total rate on this new mortgage would be6.68%.

The great thing is that Barclays wont charge an application fee or for any legal fee’s and will also provide a fee free valuation, so borrowers have nothing extra to pay. This could be a great deal for the 700,000 mortgage customers who are currently sat on standard variable rates (SVR). The industry have seen a sharp rise in borrowers staying in standard variable rates after their present deal expires. In the past home owners have moved to new deals as lenders variable rates are usually the highest priced mortgages. Following the credit crunch, the base rate has been at an historic low of 0.5% which has meant that standard variable rates have been very competitive in relation to current mortgage rates. Lenders have been trying to come up with deals to tempt their borrowers off of their rates and back into a tied in product.

Barclays are offering their great escape mortgage with no fee’s to temp customers and are even offering £300 cash back to cover any early exit fee so moving shouldn’t cost a penny.

For those that done qualify, Barclays lowest rate mortgage is their two year tracker mortgage which is the Bank of England Base Rate (0.5%) plus 1.98% which means the initial interest rate would be 2.48%. The loan to value is 70% so someone looking to buy a £200,000 property would require a £60,000 deposit. The overall cost for comparison is 3.0% with an application fee of £999.

They also offer a lifetime tracker via their Woolwich brand which is advertised as 2.58% with a loan to value of 80% and a £1499 fee. They also have an 80 percent loan to value version for 3.88%, the overall cost for comparison is 4%.

Mortgage seekers 'could be better off renting'

There could be more private sector rentals available in the coming months, an expert has said.
The government's decision to reduce the budget available for social housing in the UK may adversely affect the prospects of people seeking a mortgage deal in the coming months.

According to Nigel Terrington, chief executive of the Paragon Group of Companies - a buy-to-let home credit specialist - anyone scouring the market for a product such as a tracker mortgage may instead now opt to rent a house rather than buy one.

Mr Terrington said that the trend in housing tenures over the last decade has been towards the private rented sector instead of social homes and the measures announced by chancellor George Osborne's spending review earlier this week (October 20th) "will inevitably accelerate this shift".

He added that the decision made to move social housing rents more in line with a the market rate could result in private property becoming a genuine option for people who had not previously considered it.

Meanwhile, Paragon stated recently that landlords are confident that the UK's buy-to-let sector will grow in the near future.

(source: http://www.which4u.co.uk/mortgages/news/12221-mortgage-seekers-could-be-better-off-renting)

UK Mortgage Lending Down by 7% - CML

The latest report published by the Council of Mortgage Lenders on Wednesday, October 20th suggests that gross mortgage lending in Great Britain fell by 7% last month as compared to September 2009 and amounted to £12 billion.

As for residential mortgage lending in the Q3 of this year, it was slightly down from the same time last year (4%) and 9% from Q2 2010.

Commenting on the findings, Mr. Coogan of the Council of Mortgage Lenders said that the organisation does not expect any significant increases in lending volumes. He also added that it is not the right time for the Government to make cuts in state support for struggling borrowers. Mr. Coogan is determined that it was overall cooperation between lenders, state and advice agencies that helped decrease the number of arrears and repossessions. CML director general urges the UK Government not to "weaken the existing safety net."

The mortgage lending report for this month, which will include gross lending figures and market commentary, is expected to be published by the CML in November 2010.