Change appears to be picking up in the mortgage market lately, with many lenders introducing new criteria and reducing rates, particularly for buy to let. One key trend we can uncover from this week’s movement, however, is the 5-year fix. Responding to popular demand and increasing enquiries, lenders have been revamping their product range to offer longer terms; such as Kent Reliance’s re-introduction of its 5-year range. If that wasn’t all, Saffron Buildings Society also made headlines by launching a unique 5 year fixed Owner Occupier deal: read Enness’ featured commentary on the product in the FT Adviser here. Otherwise? Demand shows no sign of easing up and fixed rates are continuing to fall as a consequence.
Virgin Money was the first lender to get the ball rolling this week, reducing both its buy to let and residential range, while launching 2 new buy to let exclusives for intermediaries. Including a 2 year fixed rate at 1.87% up to 50% loan to value (LTV) or 2.79% for a 5-year fix, these are available for remortgage only with a £1,995 product fee and £750 cashback. Existing buy to let mortgages have also been reduced, now offering 2 year fixes at 60% LTV from 1.89%, 3 year fixes at 2.89% for 75% LTV or 3.19% for a 5 year fixed rate at 70% LTV.
Changes have also been applied to the lender’s residential range, with 3 year fixed rates now available up to 65% LTV with a rate of 1.94%. 5 year fixes are also on offer up to 65% LTV with a rate of 2.24% and a £995 product fee, or 2.44% with no fee. Yet Virgin Money wasn’t the only lender to make further reductions; The Bank of Ireland has also reduced its 2 year fixed buy to let rates by up to 0.32%, with rates now starting from 1.97%, including a 60% LTV remortgage product with no fee.
The most notable 5 year fixed deal to enter the market, however, was undoubtedly Saffron’s Owner Occupier product, which is available with a rate of 2.57%. Available up to 75% LTV for both purchase and remortgage, this comes with a £1,495 arrangement and 3% early repayment charges. The product is accessible for loans between £30,000 and £1 million, allowing borrowers to lock into lower interest rates, while benefiting from individual underwriting independent from credit scoring. This follows Saffron’s previous launch of its limited edition first time buyer 5 year fixed rate at 3.97%.
Kent Reliance also revamped its range and re-introduced 5 year fixed offers. Following increasing demand, these are available up to 90% LTV for residential mortgages, 85% LTV for interest only and buy to lets, or 80% for larger buy to let loans. The lender equally announced a new Large Loan/Large Portfolio range specifically for landlords borrowing £1 million or more. This is available up to 80% LTV and features 2 and 3 year fixed rates from 3.79%, or 4.19% for a 5-year fix.
Also tapping into the high net worth sector was Prestige Finance, announcing new products to its Prime product range as part of an improved pricing initiative. As well as providing new Large Loan products, this includes both lender fee reductions and rate reductions at 85% LTV. The new product available has a 5.29% rate for 60% LTV or 5.5% for 65% LTV. Product fees have also been reduced from £500 to £300, £1,995 to £750 and from £995 to £500 on loans up to £250,000.
The flurry of fixed rates doesn’t stop there. Kensington Mortgages were another lender to reduce rates this week, as well as significantly cutting its completion fees from £1,999 to £999. This includes 2 year fixed rates at 3.74% up to 70% LTV with a 2% completion fee or 4.24% with a £999 fee. Products are also available at 80% LTV, with a 2-year fix at 4.49% and 2% fee or 4.99% with a £999 fee.
Meanwhile, Barclays has also cut rates across 2 and 5 year fixes on its low LTV range, while also introducing a new ‘Rate Switch’ product, which allows existing customers to benefit from lower rates. 2 year fixes now start from 1.39% at 60% LTV, 1.69% for 75% LTV and 1.77% up to 80% LTV. 5 year fixed rates also include a 60% LTV product at 2.19% or 2.45% at 70% LTV.
Lenders’ greater efforts to set themselves apart on the market is evident, with Accord Mortgages even just adjusting its household expenditure estimates with a view to make mortgages more accessible and increase the number of accepted applications. Precise Mortgages have equally released new residential, second charge loan products, including 5 year fixes, zero fee options and rate reductions of up to 0.15%.
Since Natwest and RBS decided to stop offering mortgages to expats (you can read our commentary in the Guardian here), market movement has become increasingly positive. Yet competition remains fierce and the market unpredictable.
We are proud to provide access to the latest market changes at just the click of a mouse, so stay tuned for the updates as they happen. As ever, if you have any questions regarding this article or simply the mortgage market in general, please do not hesitate to contact one of our expert brokers who will always be happy to help. You can also stay on top of the latest mortgage rates and industry news with our daily rate updates.