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YourMortgage News

Within this section you will find the latest news articles regarding mortgages and home finance kindly provided by YourMortgage.co.uk, which is an excellent source of information regarding mortgages and is an online accompaniment to their magazine.

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September 2007 News

Mortgage borrowers feel pressure to buy lender's insurance

Mortgage borrowers are facing increasing pressure to purchase their lender's insurance products, research has shown. More than 30% of new mortgage borrowers felt 'pressured' into buying insurance packages from their lender over the past year, with 11% citing Mortgage Payment Protection Insurance (MPPI) , as the main product that they felt forced into buying.

PPI insures borrowers in case they are unable to make their mortgage payments due to illness or injury.

A further 17% of people felt pressured into buying buildings insurance, a 15% rise on last year's figures.

The results could indicate that consumers are unaware of whether they actually need the insurance products they are being advised to buy, as well as possibly being ill-informed about the full cost of the product.

In addition, they may not realise that they are under no obligation to buy the insurance offered by the lender.

Post Office introduce mortgages

Sep 26 2007

The Post Office has revealed its decision to offer mortgages in the North East of England, it was announced yesterday. As part of a new financial services product range, the Post Office, in alliance with Bristol and West , will also be offering savings accounts, credit cards, and personal insurance, all traded under the Post Office's own brand.

Their mortgage range, due to be launched early next year, will include a three-year fixed-rate deal at 6.09% on loans of up to 95% of the property's value.

Deals will also be available for buy to let investors and self-employed borrowers, with rates of 6.35% and 6.44%, respectively. Loans will not be available to sub-prime borrowers, and to those wanting to borrow more than 95% of a property's value.

Gary Fitton, director of lending at the Post Office, said: "We believe there is a real need for straightforward mortgage products, which don't entice customers with headline-grabbing rates and then penalise them with huge fees".

All loans will carry an arrangement fee of just £399 and will not impose higher lending charges.

Commenting on The Post Office's decision to enter the mortgage market, Louise Cuming, head of mortgages at price comparison site moneysupermarket.com, said: "In an environment where consumers are being increasingly squeezed, they are naturally looking for the lowest headline rate, and their heads are not going to be turned by the Post Office's best rate of 6.09 per cent.

"We always like to see competition in the mortgage market but I can't see this proving a threat to the more established lenders who are able to offer much more competitive deals."

All Post Office financial services will be available to customers through branches, over the phone and via the internet.

Northern Rock - business as usual

Northern Rock will continue to issue mortgages at up to 5.9 times a borrower's salary where appropriate, a spokesperson for the bank has confirmed today.

The bank's decision to uphold its lending criteria, enabling qualifying first time buyers to borrow up to £180,000 on a £30,000 salary, is accompanied by an announcement that shareholders in the company will receive their interim dividend as planned, estimated to be worth £59 million in total.

Despite accusations of 'reckless' lending practices, the Treasury's guarantee of all Northern Rock's existing deposit accounts, coupled with weekend speculation about a take-over bid, appears to have fuelled the public's confidence in the bank's potential recovery and was reflected in morning trading, with share prices rising 6.8% to 197.5p.

August sees 6% drop in mortgage lending

Mortgage lending in August was down by 6% compared to July's figures, according to the Council of Mortgage Lenders (CML).

Figures show that gross mortgage lending fell from £34.1 billion in July, to £32.2 billion in August, showing a 3% dip on August's lending figures for last year.

Stephen Leonard, of Alliance & Leicester mortgages, said: "We generally expected to see a slowdown in August and there is some seasonality to these figures, especially with many people still away on holiday.

"This also reflects strong lending figures in May, June and July, when due to increasing interest rates and the advent of HIPs, many borrowers brought forward their purchase decisions".

Abbey launches 100+ mortgages

Sep 20 2007

In a troubled week for the mortgage industry, Abbey is defying the turmoil with the launch of a new range of mortgages that allow borrowers to access more than 100 per cent loan to value. The introduction of the range flies in the face of speculation that lenders would all be tightening criteria following the credit crunch.

The new range, called '100 per cent plus' allows borrowing up to 100 per cent LTV, plus a top-up loan of up to £25,000 also secured on the property. In that sense it differs from the long-running Northern Rock Together product and the HBOS Mortgage Plus product, both of which allow borrowing to 95% LTV topped up by unsecured further loans of up to £30,000.

Rates start with a 6.99 per cent two-year tracker, ranging up to a 7.85 per cent two year fixed rate, with no arrangement fee.

Northern Rock could be broken up

The future of Northern Rock, or 'Northern Wreck', as some commentators have called it, is uncertain, but a buy-out looks to be the most likely outcome.

Lloyds TSB is widely tipped to be the most likely bidder, having circled Northern Rock since last week. Barclays, Royal Bank of Scotland and National Bank of Australia have also been names as possible buyers.

However, it is thought that Lloyds, the frontrunner, is not interested in buying Northern Rock lock, stock and barrel, but would want to pick up selected parts of the bank instead.

Homeowners should ditch SVR and take out fixed rate mortgages

Homeowners are throwing nearly £6bn down the drain every year by failing to shop around when their initial fixed rate mortgage deal comes to an end, according to research by price comparison site moneysupermarket.com.

By staying on their initial lender's standard variable rate (SVR), rather than shopping around for a new fixed rate mortgage, households can shell out an extra £2,600 in repayments over a two-year period, the site claims.

Louise Cuming, head of mortgages at moneysupemarket.com, said: "People should bear in mind that for just a little work comparing mortgages, the rewards can be huge.

"Anyone coming to the end of a fixed term product should be looking for their next deal now and not leaving it until they have languished for a while on an SVR for a while. Lenders will sting you for laziness."

House prices start to fall

House prices are falling for the first time in nearly two years, according to a small majority of chartered surveyors. According to the Royal Institute of Chartered Surveyors, 1.8 per cent more surveyors reported a fall in house prices than reported a rise, this August.

This compares with July when 10.8 per cent more surveyors reported a rise. RICS spokesman Ian Perry said: "Potential house buyers have become far more cautious as they wait and see what effect interest rates will have on household finances. "Affordability is at its most stretched in over a decade and many will worry that rising mortgage payments will prove a step too far."

The survey of chartered surveyors found that enquiries from new buyers were falling at the fastest rate in 3 years. Perry added that he believed the market would soften further during the autumn.