ANALYSIS
JONATHAN CORNELL
INDUSTRY CONSULTANT
Swaps had another mixed
week, with short-term
money falling and longer
term money edging up.
Three-month LIBOR is now 1.71%.
1-year money is down 0.05% at 1.66%
2-year money is down 0.02% at 2.19%
3-year money is up 0.05% at 2.57%
5-year money is up 0.08% at 3.08%
Santander kept us all busy last
week making numerous changes to
its proc fee structure, solicitors’
panel and products. This involved a
massive number of emails.
The most significant change is
to proc fees. Both Santander’s
lenders – Abbey and Alliance &
Leicester – are now actively
discouraging directly authorised
business that is not submitted
through clubs.
If you are not a key account,
ensure that when you submit your
applications you select a mortgage
club or you will be paid a miserly
0.2%. If you submit through a club
you will get at least 0.34% for a
standard mortgage and 0.44% for a
flexible mortgage.
Abbey has slashed its solicitor
panel, culling firms that have not
undertaken any transactions with
the lender in the past 12 months.
The lender wrote to companies
advising them of this development
but sadly, due to a data extraction
error, a number of firms that have
acted or are acting on mortgage
transactions were removed
erroneously. These companies are
being reinstated as soon as Abbey
is advised of their situation.
On the product side the lender
has introduced a two-year fixed rate
for purchases up to 75% LTV which
is exclusively for brokers. This has
a market-leading pay rate of 3.99%
and no booking fee.
Meanwhile, A&L has launched
a competitive two-year fixed rate at
5.79%, available up to 85% LTV
with a 1% fee, free valuation and
£200 cashback.
Woolwich sent out a positive
sounding email stating that as
result of an opportunity presented
14
marketwatch
Both Santander’s lenders – Alliance & Leicester
and Abbey – are discouraging directly authorised
business that is not submitted through clubs
INTEREST RATE SWAPS
6.75
6.25
5.75
5.25
4.75
4.25
3.75
3.25
2.75
2.25
1.75
1.25
Mar 08
● 1 YEAR ● 2 YEAR ● 3 YEAR ● 5 YEAR
Apr 08
May 08
Jun 08
Jul 08
Aug 08
by a reduction in the cost of fixed
rate funds, the rates on selected
products across its range were
being reduced.
While it is heartening to see
Woolwich’s rates heading south,
they now seem to be at around the
levels its rivals are offering.
The email made life easy for us
by listing new rates, the rates that
were being withdrawn and those
that were not being altered.
Woolwich scores lots of points
with me by having a service update
facility that uses a traffic-light
system.
And don’t forget, it’s also one of
the rare lenders offering something
called a buy-to-let mortgage at the
moment. It has a two-year ‘fix and
track’ deal at 3.89% that reverts to
base rate plus 1.49%. The fee for
this is £995 and the maximum LTV
is 60%.
The lender’s core three-year
fixed rate is 3.89% with a £995 fee
and maximum LTV of 60%.
And speaking of lenders that
show service standards on their
websites, the pioneer of this was
Accord Mortgages which has
recently reduced a number of rates.
Sep 08
Oct 08
Nov 08
Dec 08
Jan 09
Feb 09
The lender’s two-year fixed
rates have gone down by 0.2%, its
three-year fixed rates have reduced
by 0.1% and its five-year fixed rates
have gone down by 0.4%.
Meanwhile, Halifax has slashed
a number of product transfer and
further advance rates. There is now
a four-year tracker at 3.29% for
loans between 90% LTV and 95%
LTV with a £1,249 fee.
I’m sure this will be popular but
it’s a shame acquisition rates aren’t
quite so generous.
I’d have thought Halifax could
afford to be slightly tougher as
existing borrowers at this sort of
LTV don’t have anywhere to
remortgage to at the moment.
If you are not already a member
of the Association of Mortgage
Intermediaries I urge you to join as
soon as possible.
The organisation does a huge
amount of lobbying on behalf of
our industry behind the scenes
with parties including the
Financial Services Authority,
politicians and European
regulators, and its factsheets
alone are worth the reasonable
membership fees.
www.mortgagestrategy.co.uk
Mar 09
heroes&villains
● HERO OF THE WEEK
is the Association
of Mortgage
Intermediaries for
the work it does for
brokers but we must
be realistic about
what it can achieve.
It is not in a position
to tell lenders to
stop dual pricing,
although it would
be wonderful if it
was.
● VILLAIN OF THE WEEK
is the government
for its ludicrous
handling of the
Homeowner
Mortgage Support
Scheme. This was
only launched to
win headlines and
is hopelessly
impractical. It’s
also way behind
schedule.
MORTGAGE STRATEGY March 30, 2009
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