Britain’s biggest mortgage lender today defied Gordon Brown’s plea to cut mortgage rates. The Halifax is raising rates on some mortgage offers by 0.5% despite his calling bank chiefs to No10 to urge them to sign up to the Government’s strategy to tackle the global economic turmoil. The Prime Minister was also bluntly warned that a string of building societies could be forced out of the mortgage market by the looming crisis. Mr Brown is said to be prepared to offer banks help to raise funds but wants them to pass on interest rate cuts, do everything they can not to repossess the homes of people struggling to meet their mortgage payments, and to offer loans to first-time buyers. The Bank of England is injecting a further £15bn of liquidity into the markets, taking its total recent support to more than £50bn.
Archive for the ‘Home loans’ Category
Halifax defies plea by PM and raises its loan rates
Wednesday, April 16th, 2008Lenders raise rates despite cut by the Bank
Saturday, April 12th, 2008The Bank of England cut its base rate by o.25% to 5% on Thursday to stop the economy’s slide towards recession. However, relief for home owners was instantly undermined by a new wave of mortgage rate increases from Britain’s biggest lenders. Many lenders are yet to pass on the recent base rate reductions - instead they are busy increasing rates, demanding larger deposits, tightening lending criteria and, in some cases, withdrawing deals from the market altogether. Most of the big lenders, including Halifax, Nationwide, the Woolwich, Cheltenham & Gloucester and First Direct also said within minutes of the Bank’s announcement that they will be cutting their standard variable mortgage rates by the full 0.25%. Both Nationwide and Alliance & Leicester are believed to have been overwhelmed by applications from borrowers coming off cheap fixed deals and want to choke off the demand with yet another big increase of upto 0.35% in less than two weeks. The increases followed similar moves from Woolwich, Halifax and Abbey.
HSBC offers to match mortgage deals
Thursday, April 10th, 2008
HSBC has offered to match the interest rate of any borrower coming off their fixed rate deals. This will apply to both HSBC customers and those remortgaging. It effectively shields borrowers from the recent increases in the cost of home loans. The Rate Matcher will mean their existing fixed mortgage rates - down to a cut-off point of 4.54% - will continue for another two years. But the deal will only last for five weeks so mortgage borrowers need to act quickly to take advantage. It is only available direct to consumers as the bank does not offer its mortgage products through mortgage advisers. Borrowers can borrow up to a maximum of 80% of their property’s value (20% deposit required) and a fee will be payable depending on the rate fixed. A maximum of £250,000 can be borrowed via the Rate Matcher service, although customers with larger mortgages can take the remainder on a standard HSBC deal. The offer is only available for borrowers whose current mortgage deal runs out before the end of June. The offer is available from 14th April until 18th May. This is a pleasant change from the do-nothing attitude most big lenders appear to be adopting at the moment!
The last 100% mortgage has now been axed
Wednesday, April 9th, 2008
The last 100% mortgage on offer has been scrapped by Abbey following similar decisions by its rivals. Since the credit crunch began last summer, more than 70% of mortgage deals have disappeared. Before Christmas, 33% of lenders offered mortgages of 100% or more. Now the only remaining 100% deals, from Bristol & West and Bank of Ireland, do not qualify as ‘mainstream’ mortgages. They are aimed at first-time buyers and require a homeowner’s parents to guarantee the loan. Typically, today’s buyer must have a deposit of 5% or more. And to secure a competitive deal, 25% is needed, as lenders charge higher rates for those with smaller deposits.
