There have actually been so many new rates announced over the last two weeks it hasn’t been possible for me to talk about them all. Suffice to say if you are remortgaging or buying your first or second property rates across the board have dropped by as much as 0.3%. Arrangement fee’s also seem to be reducing slightly as well with several of our broker best buy products now having arrangement fee’s below £600 against an average fee of £999 for most headline rates a few weeks ago.

Swap rates have dropped significantly since the massive drop in BBA LIBOR over the past two months and this has helped to fuel cuts in fixed rates, however there still seems to be a general lack of movement on rates at higher loan to values for borrowers looking to remortgage. Fixed rates at 85% loan to value for example continue to sit around the 5.99% mark with little movement.

It will be interesting to see who makes the first move on this market of higher loan to value remortgage borrowers if indeed there is any drop at all, it seems almost as if the pot is so big that banks are scared to dip their toe in the water in case they get swamped. It certainly can’t be claimed that a remortgage at 85% is a greater lending risk than a purchase at the same loan to value yet you could get a much better rate if you were buying at this ltv.

Mortgage Advisors will be keeping their eyes peeled for changes on these higher LTV products and hopefully the news that interest rates are likely to remain low in the long term will help to drive swap rates down further and one of the big banks into releasing some decent remortgage rates for those with little equity. And if you’re listening a 95% purchase product wouldn’t go amiss either!

As a mortgage advisor you often have to try and combat the expert opinion of “the bloke down the pub” and even apparently knowledgeable sources.

Whilst looking for a table of current standard variable rates recently I came across this quote on fool.co.uk;

“First of all, let’s look at Standard Variable Rate (SVR). This is the standard rate of interest that lenders use and like it says, it is variable. This is because it is linked to the Bank of England base rate – so whenever that goes up, so will your mortgage rate and thus so will your mortgage payments.

However, SVR Mortgages aren’t just linked to the base rate, they’re usually set at around 1-2% higher. This makes this type of mortgage very expensive.”

Any mortgage broker worth his salt would cringe at the apparent advice that SVR’s are linked to the bank base rate and will move in line with them. Any borrower whose SVR is still standing above 3% is probably more than aware that this is not the case.

Actually the lenders SVR is a rate that could move in relation to many things including the LIBOR rate, bank base rate and just as importantly the need to attract savers in order to lend money in the first place which is one of the key reasons why the full extent of the cuts in bank base rate has not been passed on by many banks as well as their obvious need to re-capitalise.

What’s the point you ask? When you’re looking to find out what to do with your mortgage speak to a qualified and authorised mortgage broker whose advice is properly scrutinised for accuracy

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