Posts with tag: mortgage rates

Buy-to-Let Lenders Favouring Percentage-Based Fees

Published On: April 20, 2017 at 8:11 am

Tags: affordability,buy to let mortgages,finance,mortgage fees,mortgage rates

Buy-to-Let Lenders Favouring Percentage-Based Fees

Percentage-based fees for arranging loans have become the new standard among buy-to-let mortgage lenders, according to the latest Buy-to-Let Mortgage Costs Index from Mortgages for Business.

Flat fees have long been popular as a way for lenders to maintain profitability, while still offering competitive rates. Meanwhile, other products instead carry a variable fee based on the loan amount.

Figures from the first quarter (Q1) of 2017 show that 44% of all buy-to-let mortgage products now carry percentage-based fees, overtaking flat fees (41%) for the first time in four years.

There was also a rise in the average flat fee, up to £1,446 from £1,397 in Q4 2016. Together, these changes have increased the average effect of mortgage charges to 0.64%. This compares to 0.62% in Q4, and is the strongest effect recorded since the first half (H1) of 2015.

Steve Olejnik, the COO of Mortgages for Business, comments: “With the challenges lenders have faced to generate business in the face of successive blows to the buy-to-let sector, it is only natural that many have chosen to focus on cutting rates at the cost of increased fees. The recent trend towards percentage-based fees is an example of lenders doing exactly this, as fees of this type become more expensive for larger loans.”

The index also shows that there has been a shift in the pricing of five-years fixed rate products. Although products available at 75% loan-to-value (LTV) and below remained on trend, five-year fixed at higher LTVs saw a 0.2% rise in headline rates.

This was fuelled by an influx of investor demand following tighter Prudential Regulation Authority (PRA) affordability guidelines, which only partially apply to long-term fixed rates.

Landlords, have you seen a move towards percentage-based fees from buy-to-let lenders in recent months? Will this affect your decision to take out a loan?

New mortgage rates announced at the Mansfield and Accord

Published On: March 13, 2017 at 4:08 pm

Author: Em Morley

Categories: Finance News

Tags: buy to let mortgages,Buy-to-Let,landlords,mortgage rates

Mansfield Building Society has moved to increase its maximum loan size from £300,000 to £500,000 across its buy-to-let mortgage range. This is subject to the borrower having a maximum of 15 mortgages outstanding with alternative lenders.

The Mansfield will also permit buy-to-let investors to borrow up to £1m in total, up from 500,000, after changes to its lending criteria.

Exciting

Steve Walton, national development manager at Mansfield, observed: ‘We’re taking these measures to make our individual underwriting proposition more exciting and available to larger portfolio landlords on higher value housing stock.’[1]

‘Landlords need more choice, especially given the Government’s reduction in tax relief and the regulatory change to rental income calculations. We believe that these changes will be well received and we’re looking forward to being able to offer brokers and their clients a fresh alternative from a lender with a flexible and pragmatic approach,’ he added.[1]

New mortgage rates announced at the Mansfield and Accord

Re-mortgaging

Meanwhile, Accord Mortgages has launched two new fixed-rate mortgages with no up-front fees. These have been designed to help borrowers manage the original cost of remortgaging.

There is a 65% LTV two-year fix available at 1.66%, while borrowers with a 75% LTV mortgage can secure a five-year fix at 2.24%. Both of these products come with free standard valuation and free legal fees.

What’s more, Accord has cut the rate on its two-year base rate tracker at 65% LTV, by 0.05%, to 1.24%. This allows borrowers more flexibility in leaving their mortgage early without paying any redemption fees.

David Robinson, National Intermediary Sales Manager at Accord, said: ‘It is proving to be a popular time for borrowers to remortgage at the moment, especially those seeking lower loan-to-value deals.’[2]

‘We believe that our new remortgage options will prove popular amongst borrowers and the options across the different terms, plus the additional features, will help brokers to choose the best loan to suit their clients’ requirements,’ he added.[2]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/3/mansfield-bs-increases-max-loan-size-to-500-000

[2] http://www.propertyreporter.co.uk/finance/new-remortgage-products-lanuch-at-accord.html

Buy-to-let costs showing signs of consistency

Published On: February 14, 2017 at 11:02 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,buy-to-let mortgage costs,landlords,mortgage rates

Fresh research from Mortgage Brain has revealed that buy-to-let mortgage costs remained at record lows during the last three months.

Over the last three years, there have been strong year-on-year reductions in the cost of buy-to-let mortgages. For example, the cost of an 80% LTV two-year fixed rate is now 18% less than it was at the beginning of 2014 and 11% less than one year ago.

Low rates

In addition, the lowest rate three-year fix at 80% LTV (3.39%) is 16% less than it was three years ago and 10% less than last year.

For a 60% LTV five-year fix, rates are 15% lower than in 2014. For 70% and 80% LTV, rates are 14% and 11% lower respectively.

Despite the long period of reducing mortgage rates, short term analysis reveals there are signs of potential stabilisation with mixed movement in costs of all major BTL products in the last three months.

A three-year fix at 80% LTV costs 4% less than it did three months ago. The costs of a two-year fix at 60% and 80% LTV, a three-year fix at 70% LTV and a five-year fix at 60% LTV are all down by just 1% in comparison to November 2016.

Buy-to-let costs showing signs of consistency

Consistency

Mark Lofthouse, CEO of Mortgage Brain, observed: ‘Like our recent residential mortgage product analysis the buy-to-let sector looks like it could be levelling out and moving away from the long period of historic lows in terms of costs and rates.’[1]

‘Buy-to-let investors can still take advantage of some good savings and low rates when compared to this time last year, however, the mixed and marginal movement in costs over the past three months could be seen as a further sign of stability, or even the start of a period of rises,’ Lofthouse added.[1]

[1] http://www.propertyreporter.co.uk/finance/btl-sector-shows-further-signs-of-stability.html

Buy-to-let rates set to increase in 2017

Published On: January 25, 2017 at 10:10 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,buy-to-let landlords,higher mortgage rates,mortgage rates

A leading mortgage expert has predicted that an increase in swap rates is likely to be passed on to buy-to-let landlords during 2017.

This was despite buy-to-let mortgage rates being largely unaffected by a significant increase in rates during the final quarter of 2016.

Bank Rate Lows

The Q4 results of Mortgages for Business’ Buy-to-Let Mortgage Costs Index showed that while swap rates rose, the record low Bank Rate of 0.25% saw buy-to-let mortgage headline rates largely unchanged.

David Whittaker, chief executive of Mortgages for Business, feels that lenders will be left with no choice but to introduce higher rates. This, he feels, would be particularly prominent for buy-to-let landlords who have chosen to incorporate.

Mr Whittaker said: ‘With demand in the buy-to-let sector already under pressure from both fiscal and regulatory changes, it is good to see that lenders have not further burdened landlords by increasing interest rates.’[1]

‘However, with rising swap rates this situation cannot continue forever and we would expect to see increases at some point in 2017 as lenders factor in the additional time spent on deeper background checks and assessing affordability, particularly from landlords borrowing in a limited company capacity,’ he added.[1]

Buy-to-let rates set to increase in 2017

Vigilant

Continuing, Whittaker observed: ‘Whether increases happen before 1st October when lenders will be obliged to be extra vigilant while assessing applications from portfolio landlords remains to be seen, but we will be watching the market closely in this respect.’[1]

Percentage-based fees products accounted for 41% of buy-to-let mortgages in Q4. Fee-free products also gained in market share, making up 16% overall.

Products with flat fees fell for the third successive quarter. Their average price is now £1,397, in comparison to £1,556 at the start of 2016.

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/buy-to-let-rates-set-to-rise

Accord Mortgages slashes rates for fixed products

Published On: January 23, 2017 at 3:48 pm

Author: Em Morley

Categories: Finance News

Tags: Accord,Buy-to-Let,fixed rate mortgage products,mortgage rates

Accord Mortgages has moved to announce that it has lowered rates on a range of selected fixed rate products by up to 0.24%.

The intermediary only lender has slashed rates at 75%, 80%, 85% and 90% LTV values across two, three and five-year terms.

Deals

House purchase customers can take advantage of a competitive five-year fixed rate mortgage at 2.20% with a 20% deposit, or 85% LTV on a 2.39% rate.

Both of these mortgage deals include additional features of £250 cash back on completion and free standard valuation, with a £995 product fee.

Those investors looking for a shorter deal can look at a three-year deal at 2.37% at 90% LTV. This deal is available for both buyers and borrowers looking to remortgage and again comes with a £995 product fee.

What’s more, Accord has launched a 2.76% three-year fix at 90% LTV deal for home buyers. This deal comes with no up-front fees plus £250 cashback on completion, with free valuation.

Accord Mortgages slashes rates for fixed products

Attractive

David Robinson, Accord’s National Intermediary Sales Manager, observed: ‘We are sure the new rates will prove attractive to brokers and borrowers, and we are keen to offer mortgages that deliver value for money to our customers with features like cashback on completion. The five-year rate reductions will appeal to borrowers looking for the security of fixing their mortgage repayments to a competitive rate for a longer period.’[1]

[1] http://www.propertyreporter.co.uk/finance/accord-announces-reductions-across-s3lected-fixed-rate-products.html

Specialist Buy-to-Let Lender Launches First Products for Owner-Occupiers

Published On: January 16, 2017 at 10:10 am

Author: Em Morley

Categories: Finance News

Tags: buy to let mortgages,finance,homeowners,mortgage rates

Specialist buy-to-let lender Paragon Mortgages has today announced the first phase of its new range of residential mortgage products for owner-occupiers.

The specialist buy-to-let lender aims to augment competition and choice for customers with complex incomes in unusual segments of the owner-occupier market.

Specialist Buy-to-Let Lender Launches First Products for Owner-Occupiers

Customers in specialist sectors, such as self-employed and those borrowing into retirement, are often considered too complicated by mainstream lenders, and face limited product choice and innovation as a result.

Now, the specialist buy-to-let lender will address this issue, as its experienced underwriters will work closely with mortgage advisers to support customers, assessing each case on an individual basis.

Provided by Paragon Group’s banking subsidiary, Paragon Bank, the first products to launch include two and five-year fixed rate mortgages, available at 75% and 85% loan-to-value (LTV). Interest rates begin at 3.29% for two-year products and 3.49% for five-year deals.

The first phase of the launch, in partnership with Legal & General Mortgage Club, will see products distributed via three of Legal & General’s key intermediary partners.

John Heron, the Managing Director of Paragon Mortgages, says: “Customers with complex incomes looking for a residential mortgage deserve access to a wider choice of mortgage products and to specialist underwriting that recognises their unique circumstances.

“From our experience in the buy-to-let market, we know that customers with multiple sources of income are often amongst the most credit-worthy, and we see a unique opportunity to leverage this experience and bring new choice and competition to the owner-occupied market.”

The Director of Legal & General Mortgage Club, Jeremy Duncombe, also comments: “We are delighted to see Paragon enter the specialist residential market and welcome the further competition they will bring to the residential mortgage market. Their detailed approach to underwriting and experience in lending to complex customers will be a real asset both to brokers and customers who struggle to find products with high-street lenders.

“Legal & General Mortgage Club strives to continue to bring choice and competition to the market for our brokers, and Paragon will be a great addition to our proposition.”

We will keep you up to date with the latest news from the specialist buy-to-let lender at Landlord News.