THE MORTGAGE MINEFIELD by Naomi Caine of Sunday Herald

Is it time to fix your mortgage rate? The average rate on two years fixes has fallen to 4.52%, it's lowest level since September 2003, according to research from Moneyfacts. There are also more loans available to borrowers with smaller deposits. Since the credit crunch, banks and building societies have taken a more cautious approach to lending and have been reluctant to advance loans to borrowers with a deposit of less than 10% believing them to be higher risk.

So why are fixed rates coming down? The price falls partly reflect a general downward trend in so called swap rates but they also reflect a more stable environment. House prices are now less shaky and lenders are willing to take on more business, so competition is hotting up. Lenders also have more room to manoeuvre on price as they have built in fatter profit margins in recent years and so have greater scope to to lower rates.

But is now a good time to fix, even though some rates have come down? If you already have a mortgage and you are paying the lenders standard variable rate(SVR), it might make financial sence to switch, especially as a number of lenders have recently upped their SVR's. It is still more expensive to fix than stick with a tracker or the lender's SVR, but the gap is getting smaller. This narrowing of the price gap has prompted more borrowers to opt for a fix and many people expect the gap to get even narrower as variable artes rise further.

Knowing what the future for interest rates looks like is an exercise in crystall ball gazing, but the reality is that there is only one way interest rates can now move...... it's just when and by how much!!

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion.

Sunday times article by Elizabeth Colman

Brokers are urging homeowners on standard variable rate (SVR) mortgages to move onto  fixed rate loans as they are at their chespest for 10 months. Borrowers paying the average SVR could save £16,257 on a £200,000 mortgage over 5 years by remortgaging onto the market leading product.

The reasearch comes as markets fear that interest rates could go up more sharply than predicted because of a surprise jump in inflation. The Office for National Satistics said inflation rose to 3.4% last month from 3% in February. The figures exceed analysts forecasts for an increase of about 3.1% in the consumers price index.

British population were told to expect a rise in interet rates after living costs soared. Inflation leapt to 5.3% last month- the biggest jump since July 1991.  Bank of England govenor Mervyn King wrote to Chancellor George Osbourne yesterday to say inflation was highre than expected.

We finally have a new government today, however with this starts the extensive cuts that we have all been expecting. The new government have already announced that it will cut costs by £6 billion this year and an emergency budget has been announced to be held within the next 50 days.

With the economy still reeling from the effects of the credit crunch and with the Euro zone now in melt down it is clear that we are going to be in for a bumpy ride over the next 12 months. In the UK unemployment is currently standing at 2,510,000, the highest level since December 1994, and economists are predicting that this will continue to rise. In addition to this it is also expected that interest rates will now rise faster than expected with a potential increase before the end of 2010.

If you have not already protected your mortgage in the event of unemployment this is now the time to do so before it is too late:-

Some facts:-

* We can now set up a policy even if you are not changing your mortgage

* Rates start from as low as £3.34 per £100 of cover

* You can also protect mortgage associated costs such as life cover, home insurance and secured loans

* Some providers allow up to an additional 50% cover

All providers of unemployment cover have a waiting period whereby the policy must be in force before a claim can be made. Depending on provider this can be up to 4 months. Therefore the sooner you have your unemployment cover in force the safer you will be in the event of a claim.

To obtain a free , no obligation quote, please call our office on 0141-337-3393.

DO NOT WAIT UNTIL IT IS TO LATE

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion

Sunday times article by Elizabeth Coleman

The Election results may lead to rate rises, so borrowers should explore their options. Mortgage costs could rise sooner than expected after last weeks election failed to deliver an outright majority for the Conservatives. Economists said that the Bank of England may now come under pressure to raise interest rates if sterling remains weak. This increases import prices, which in turn pushes up inflation. The centre of Economics and Business research raised it's forecast for bank rate last week. It previously thought it would remain on hold until August 2011, but now expects a rise of 0.25% as soon as this June. With most economist expecting rates to rise by 0.25% now is the time to take stock of your mortgage and ensure that you have the best overall product. For the nervous it is essential to get onto one of the low fixed rate schems that are currently on the market with the more adventurous opting for offset mortgages.

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion.

The number of loan approvals for house purchase (47,094) was lower than the January figure (48,099) and below the previous six-month average (55,130), the Bank of England have revealed today.

Lending to individuals: February 2010

Total net lending to individuals rose by £2.1 billion in February. The twelve-month growth rate ticked up to 0.9%. The three-month annualised growth rate was 1.5%, a 0.2 percentage points increase on January.

Within the total, net lending secured on dwellings increased by £1.6 billion, above the January increase of £1.5 billion and the previous six-month average of £1.4 billion. The twelve-month growth rate was unchanged, at 1.0%.

The three-month annualised growth rate was also unchanged, at 1.4%. Approvals for remortgaging (27,297) were higher than in January and also higher than the previous six-month average, while approvals for other purposes (25,017) were higher than in January but still below the previous six-month average.

Chancellor Alistair Darling has today confirmed that the starting threshold for Stamp Duty will be raised from £125,000 to £250,000 for first-time buyers

The reform will apply for this year and next and will come into effect as of midnight tonight. The Chancellor outlines that the move will help nine in ten first-time buyers.

The levy for properties over £1m will be charged at 5% to compensate for raising the threshold.

The Stamp Duty Holiday had  been in place since September 2008 and lasted until December 31 last year. The starting threshold for Stamp Duty was raised from £125,000 to £175,000.

Until now a levy of 1% of the purchase price had to be paid by those buying a property of over £125,000 and up to £250,000. The tax went up to 3% for properties over £250,000 and up to £500,00 and properties worth over £500,000 were charged Stamp Duty at a rate of 4%.

The Council of Mortgage Lenders (CML) estimated that around 92% of first-time buyers would have been exempt from paying Stamp Duty last year had the starting threshold already been raised to £250,000.

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion.

2010 RICS European Housing Review shows UK was among only five countries that saw house prices rising in 2009

Signs of recovery are already visible in some European housing markets, especially in sales levels and prices, says the latest RICS European Housing Review launched today in Brussels (2 March 2010).

A significant number of European residential markets were starting to show signs of recovery as early as spring / summer 2009 and further revival is expected in 2010. Norway led the way with prices rising by 12 percent, followed by Finland where they rose by eight percent and then Sweden, who saw a seven percent increase. In the UK, prices rose by one percent in 2009 overall, but by 10 percent since their lowest point in April.

Low interest rates and reviving economies helped to avoid housing market meltdown across much of Europe. In Germany, Italy, Netherlands and France, last year's falls were relatively moderate (between -4 percent to -6 percent) and though today markets are still fragile, they are starting to stabilise and to see some price growth.

However countries with vulnerable economies will continue to experience depressed markets and falling prices. The worst performing markets of 2009 were Ireland, Spain, Greece, most central and eastern European countries, and especially the Baltic States where prices declined between -27 percent to -53 percent in 2009. Geographically, together they form an unlucky horseshoe around the edges of Europe.

The economies of Europe are only showing weak signs of growth and this will hold back housing markets, especially if unemployment continues to rise. Most European house building industries, with the exception of Germany and Switzerland, are also still suffering the impact of the global financial backlash and housing supply will need some time to recover.

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%.  The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion

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ARTICLE IN SUNDAY TIMES  by Simon Read

The days of rock bottom mortgages may be over as one of the biggest lenders hoists its variable rate

Mortgage rates are set to soar for hundress of thousands of borrowers after the Skipton announced plans to raise its standard variable rate by almost 0.5% despite there being no increa in the bank base rate for a year. Other building societies are likely to follow Skipson's lead as it makes it easier for others to follow as the will get less flack. Building societies that has so far have increased their variable rate include Skipton, Scottish, Ipswich, Cambridge, Marsden and Mansfield.

The Skipton which has just over 100,000 borrowers, will incresae it's rate from 3.5% to 4.95% from 1st March leaving borrowers on a typical £150,000 mortgage needing to find around an extra £1,500 a year. The increase will also apply to the Societies specialist lending subsidiary Amber Homeloans.

Anyone facing an increased SVR should consider switching lenders and deals!

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with its programme of asset purchases totalling £200 billion financed by the issuance of central bank reserves

   The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with its programme of asset purchases totalling £200 billion financed by the issuance of central bank reserves

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Sunday Times article by Elizabeth Colman

Government backed banks raised mortgage rates and introduced stricter lending criteria last week amid concerns that this year's house price recovery is not sustainable.

Northern Rock increased it's market leading 5 year fixed rate for remortgages from 4.99% to 5.39% while the equivalent deal for homebuyers went up from 4.99% to 5.29%. Both require a 30% deposit.

Royal Bank of Scotland, 84% owned by the taxpayer, surprised brokers by  increasing the deposit required for its popular two year tracker from 20% to 25%.

Industry sources confirmed most of the big mortgage lenders were anticipating a double dip in house prices next year. Average house prices fell 20% from the peak of £186,044 in November 2007 to a trough of £147,746 in February this year according to the Nationwide house price index.

Bank of England Maintains Bank Rate At 0.5% and Increases Size of Asset Purchase Programme by £25 Billion to £200 Billion

Bank of England Maintains Bank Rate at 0.5% and continues with £175 Billion Asset Purchase Programme

SUNDAY TIMES ARTICLE BY ELIZABETH COLMAN

Two of Britains biggest lenders raised the cost of new mortgages last week, one day after the bank rate was kept on hold for the sixth consecutive month.

Lenders have cosnsistently put up the cost of new mortgages in the past six months, despite bank rate being on hold at 0.5% since March. Experts warned that fixed rate mortgages could soar to 10% when the Bank of England starts to raise rates again, if lenders continue to profiteer.

Darren Cook of Moneyfacts, the financial data firm said: ''It's astonishing to see margins continuing to grow at the expense of borrowers. If mortgage rates go on like this, and they will, the closer we get to the bank increasing rates, we could soon see mortgage rates of close to 10%.''

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with its programme of asset purchases totalling £175 billion financed by the issuance of central bank reserves.

The Committee expects the announced programme to take another two months to complete. The scale of the programme will be kept under review.

Scottish mortgage market begins to stabilise in second quarter
26 August 2009

New data from the Council of Mortgage lenders shows lending activity in Scotland began to stabilise in the second quarter, mirroring the trend seen in the UK more widely

In the second quarter of 2009 there were 11,400 house purchase loans taken out in Scotland, a 50% rise from 7,600 in the previous quarter, but 39% below the same quarter a year earlier.

The rise in mortgage lending in Scotland was spread evenly across first-time buyers and home movers. There were 4,300 loans to first-time buyers, up 54% from the previous quarter, and 7,200 loans to home movers, up 53% from the first quarter.

There is some evidence that the tightening in lending criteria is slowing. First-time buyers typically put down a 25% deposit in the second quarter, unchanged from the previous quarter but up from 13% a year earlier. Home movers typically borrowed 70% of the property's value, down from 71% in the previous quarter and 73% in the same quarter a year earlier.

Income multiples rose modestly in the second quarter. First-time buyers typically borrowed 2.85 times their income (3.06 across the UK), up from 2.74 in the first quarter of 2009. Home movers typically borrowed 2.55 times their income (2.73 across the UK), compared with 2.51 in the previous quarter.

Scottish first-time buyers typically spent 14.1% of their income on mortgage interest payments (compared with 15% across the UK), the lowest share since the first quarter of 2006.  And interest payments typically consumed 11.1% of Scottish home movers' income (compared with 11.3% across the UK), the lowest share since the second quarter of 2004.

Mortgages are slightly more affordable in Scotland.  This is principally because house prices remain lower than the UK average, leading to modestly lower average income multiples and debt servicing costs.

Remortgage activity remains subdued, with demand suppressed by attractive reversion rates and access to the best deals restricted to those with large amounts of equity. There were 9,000 remortgage loans in Scotland in the second quarter, worth £900 million, compared with 11,000 loans worth £1.6 billion in the first quarter of 2009. As with house purchase lending, this pattern echoes what is happening across the UK.

Bank of England Maintains Bank Rate at 0.5% and continues with £125 Billion Asset Purchase Programme

Commenting, Martin Ellis, housing economist, said:

"There was a 0.5% decline in average UK house prices in June.  On a quarterly basis, the 1.9% fall in house prices in the second quarter was the smallest since 2008 quarter one. These figures provide evidence that the underlying pace of house price decline is easing.

There are further indications of a modest improvement in sales activity, albeit at a very low level.  Industry-wide figures show that the number of mortgages approved to finance house purchase increased for the fourth successive month in May.  Approvals were at their highest level since April 2008 and 10% higher than a year earlier.

Improvements in affordability and low interest rates have stimulated housing demand.  This, together with a low level of properties available for sale, has helped to stabilise activity and reduce the underlying rate of house price decline in recent months. 

Whilst there have been encouraging recent signs of improvement, the outlook for the UK economy remains uncertain with unemployment set to continue rising for sometime.  Overall, we expect to see a continuing mixed pattern of monthly house price rises and falls over the remainder of 2009."

Article in Glasgow Herald by Naomi Caine

There are signs that buyers are returning to the hosuing markets, but anyone thinking of moving home should expect to pay more for their mortgage.

Anyone thinking of buying a house , or switching their mortgage, could pay a high price as almost all lenders have raised the cost of their fixed rates over the past few days. Nationwide, for example, has raised rates twice in as many weeks. A 3 year fixeed rate with a 25% deposit now costs 4.98% up from 4.54% which was an increase from the previous rate of 4.28%.

After a period of relative calm in the mortgage market, lenders are stumbling over each other to increase fixed rate mortagges. The last time we saw such frantic activity was at the end of June 2008 when the average 2 year fixed rate reached a staggering 7.08%.

The rise in swap rates might have triggered the recnt bout of increases, but lenders have also wasted no oppertunity in boosting their profits margins. In June 2008 when the average rate hit its peak, the margin over swaps was 0.76% points. Today the margin is 2.81 points

bascically if your thinking of fixing your mortgage act quickly

Article from Glasgow Herald by Naomi Caine

There are signs that first time buyers(FTB) are coming back into the housing market. There were 13,5000 loans to FTB's in April which is an11% jump on the previous month. FTB's are the life blood of the market, so any increase is welcome. As mortgage rates have come down over the last year the Council of Mortgage Lenders figures show that FTB's typically commit 15% of their income to their mortgage interest, the lowest proportion since May 2004. But if purchases are more afforadable, what's holding young buyers back? Basically there is still a lack of readily available finance for first time buyers, especially those with small deposits. Abbey & Nationwide are amoungs a small group of lenders who will do deals on up to 90% of the property's value. Most banks and building societies still insist on a deposit of at least 15% and the best are only open to people with a deposit in excess of 25%.

Lenders who will entertain first time borrowers with only a 5% deposit are a rarity indeed. Nationwide has just relaxed it's deposit rules but it's 95% deals are only available to existing customers. Or there's Lloyds TSB's "Lend a Hand deal".  This offers a 95% mortgage -as long as their partents, relatives or friends are willing to stump up a further  20% of the property value in savings. This is then held in a Lloyds TSB fixed rate bond currently at 3.5% and the bank has legal rights over the money. Another option is that most mainstream lenders will allow a parent to act as a guarantor on a mortgage.

An alternative for people on low incomes is to seek government help through a shared equity scheme, one of a range of measures under thr LIFT banner-low cost inititaive for first time buyers. With shared equity you buy a portion of their house, usually between 60 &-80%. The purchase is financed in the normal way, through a bank or building society, which would apply the usual lending criteria. The remaining equity stake is the effectively bought by the governmant, through a registered social landlord, often a housing association. Until recently shared equity schemes were available mainly to new housing developments, but government opened the scheme to a wider market in March 2009. However, there are strick eligibility criteria, so you need to check the details at the Communities Scotland website  www.communities-scotland.gov.uk

From article in Telegrah by Kara Gammell

The cost of fixed rate mortgages is already beginning to rise and is predicted that it will go higher still in the coming months. This is bad news for consumers because, according to the CML, 69% of mortgages taken out in April 2009 were fixed- the higherst share since June 2008.

Nationwide, C&G and Northern Rock have raised rates on their fixed price mortgages following steep increases in the swap rates upon which fixed rate mortgages are based. Other lenders are expected to follow suit!

If  you wish to obtain the cheapest deal move quickly and phone the Independent Mortgage Store   on 0141-337-3393

Sunday Times article by Elizabeth Colman

Britain's banks stand to reap a £900m windfall from the recovery as mortgages look set to rise for the first time in a year. Anaylists have warned that the average 5 year fix could hit 6% within weeks. Deals as low as 4.5% are still available but they are expected to disappear fast. While the Bank of England's rate is  not expected to go up until next year, the cost of funding mortgages has already moved in anticipation. The message for borrowers wanting to take a fixed rate is clear- GET IN NOW OR MISS OUT ON THE CURRENT RELATIVELY LOW RATES.

Bank of England Maintains Bank Rate at 0.5% and continues with £125 Billion Asset Purchase Programme

As I'm sure you know, The Bank of England did cut base interest rates on Thursday to 1%. Many lenders are still to set their new rates so contact us if you need advice on remortgaging. 

The Bank of England's rate setting committee meets today and is widely expected to recommend cutting interest rates to 1%.  This is great news for homeowners on variable rate mortgages but don't be too complacent - this article appeared in Monday's Daily Mail suggesting that some borrowers will be paying virtually no mortgage interest but others' homes may heading for negative equity.

Monday's mortgage report from the Daily Mail

By Daily Mail Reporter
Last updated at 11:21 AM on 02nd February 2009

Some homeowners could see their monthly mortgage payments drop as low as zero this week.

The Bank of England is expected to cut interest rates to just 1 per cent on Thursday, bringing a windfall to those with interest-only tracker loans.

If it does, Cheltenham & Gloucester customers who took out a deal at 1.01 percentage points below the Bank's base rate will be paying no interest at all.

For technical reasons, they will still have to make payments - 8p a month for a £100,000 loan - but the money will be refunded.

Those with repayment mortgages will need to pay around £333 a month on the same-sized loan.

Most other tracker customers will gain but rates on new products are generally one or two percentage points above the base rate.

Some have 'collars' restricting the level they can fall to.

Homeowners on good mortgage deals are being warned against complacency however because property prices are plunging.

Since the market peaked in October 2007, the average value of a home has dropped by nearly 20 per cent, according to the Nationwide Building Society. About 1.2million homeowners are in negative equity - with their loan exceeding the value of their property.

Blogging is not necessarily my strong point but in the interests of keeping you up to date with the latest in mortgages here goes...!