Colin Bell, Chief Operating Officer of Purely Mortgages says: “Money market swap rates have risen significantly in anticipation of a bank base rate increase – take a fixed rate product now before all the lenders push up their rates.”
Commentary:
"We have seen another week of rate increases in the fixed rate arena. The Portman Building Society has announced that today is the last day for its current range of fixed rates. Halifax has increased its rates; IF has moved up as well. The only lender currently maintaining great rates and superb service is Alliance & Leicester.
"Interestingly, money market swap rates have shot up in the last 10 days – and this is reflected in the rate withdrawals and upward movement across the board. 2 year swap rates have risen 15 points since mid February. As Purely has been pointing out since the start of 2005, there is upward pressure on rates and lenders are looking to break even or make money on 2 year fixed rate money. If you see a good 2 year fixed rate (anything less than 5%) then jump in and grab it.
"Somewhat ignored in general media commentary have been capped rates. The 2 year capped rate from Coventry at 4.99% is a secret that should be shared – especially now that most two year fixed rates are above 5%.
"This week has seen HBOS announce an increase in arrears levels – this is serious enough news to affect their and other banks’ share price. Coupled with an increase in bankruptcies, it could be time to start looking more closely at the sub prime (or adverse credit) mortgage sector, giving readers advice on what to do if they get into arrears or more serious trouble and need to remortgage. The most important advice to readers is to use a reputable, no fees broker and get good advice on the whole range of products that are available. Many sub prime brokers charge large fees - sometimes up to 5% of the mortgage - and don’t offer whole of market advice so don’t place clients on the best rate for their circumstances. With one in ten borrowers having a less than perfect credit history, this is a big sector of the market and should not be neglected.
Current ‘Best Buys’
Fixed/Capped
Lender
Rate
Term
Initial Rate
APR
Reverts To
Incentives
Early Repayment Charges
Portman Building Society
2.35% Fixed
Until 30/04/2007
2.35%
6.2%
6.74%
Beyond term
Alliance & Leicester
4.44%
Until 31/5/07
Then 1% over BBR for 1 year
4.44%
6.0%
6.84%
1 Year ‘Tail’
Alliance & Leicester
4.69%
Until 31/5/07
4.69%
5.6%
6.84%
Within term
Alliance & Leicester
4.89% Fixed
Until 31/05/10
4.89%
5.6%
6.84%
Within term
Clydesdale (Semi Exclusive)
4.90% Fixed
2 Years
4.90%
6.8%
6.84%
Free Valuation & Legal Fees
Within term
Coventry Building Society
Capped at 4.99% (Bank Base plus 0.69% for life)
To 30/06/07
4.99%
5.5%
5.44%
Free Valuation to £650.
Within Term
Discount/Tracker
Abbey
0.31% under Bank Base
2 Years
4.44%
6.7%
6.75%
Within term
Alliance & Leicester
0.01% under Bank Base
2 Years
4.74%
5.8%
6.84%
Free legals and refund of valuation fee for remortgages
Within term
Portman Building Society
2.26% discount from SVR
Until 30/04/07
4.48%
6.6%
6.74%
Within term
Intelligent Finance
0.14 over Bank Base
Until 31/5/07
4.89%
6.0%
5.95%
Free legals and refund of valuation fee for remortgages
Within term
Nottingham Building Society
1.99% Discount from SVR
3 Years
4.65%
6.4%
6.64%
Within Term
