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This is our take on what is currently happening in the mortgage market. Our views are often cited in several national publications, including; BBC News, The Times, Telegraph, City AM, FT Adviser and Daily Mail, as well as a number of key trade publications, so this should keep you ahead of the curve. If you have any questions on any of these stories, or would like further information, please do not hesitate to get in touch.
More product innovation around early redemption charges needed
Fixed rates generally come with early redemption charges if the loan is redeemed within the fixed term period. These vary lender to lender, but the classic structure is 2-year fixed – 2% of the loan amount in year 1, 1% of the loan amount in year 2. A 5-year fixed is generally 5% of the loan year 1, 4% year 2, 3% year 3, 2% year 4, 1% year 5. These structures almost never change and have been the same whether rates in the market are 3% or 1% like we are currently seeing.
HSBC enters the 5.5 x income market
HSBC launched a new 5.5 x income product this morning, available for earners over £100k per year up to 90% LTV, unlike Nationwide’s 5.5x offering this can be done on any of their products including a 2-year fixed term (where nationwide is only for 5 year +). Moreover, this is total income and can include bonus and commission so is thus available to a wider audience. There are other lenders in this space, but this gives a large amount of increased flexibility for many.
First 2-year fixed to go below 0.8%
The Coop / Platform (their intermediary side) has just launched a 2-year fixed rate product at an astonishingly low 0.79%. We have been surprised at the speed of decline of the rates on offer at present and this is a significant fall from the previous best rate available of 0.84%. This is particularly surprising giving the recent inflation data to emerge and comment that the Bank of England may have to raise rates to curb inflation if it continues to grow.