Mortgage rates fall as new fixed-rate deals launched

Published: 5:31PM GMT 03 Mar 2010

Co-operative Financial Services is offering a two-year fixed-rate mortgage at
3.19pc, taking it straight to the top of the best buy tables. The loan,
which is available through both The Co-operative Bank and Britannia, is for
people with at least a 25pc deposit who pay a £999 fee.

It is also offering a rate of 4.49pc for people borrowing up to 85pc of their
home’s value, the lowest two-year fixed rate available for people with only
a 15pc deposit.

Spanish banking giant Santander also reduced rates on a number of its
mortgages by 0.74pc for people borrowing up to 80pc of their home’s value.
The move leaves the group’s two-year tracker rate for people buying a home
with a 20pc deposit at 3.25pc with a £995 fee, while it has a two-year fixed
rate deal of 4.95pc with the same conditions.

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Mortgage costs leap as Skipton Building Society lifts rate

Tens of thousands of borrowers face a shock jump in mortgage payments after Skipton Building Society, Britain’s fifth-largest building society, confirmed plans to raise its standard variable rate from 3.5 per cent to 4.95 per cent.
The move, to take effect from March 1, will raise mortgage repayments by up to 40 per cent for some borrowers, adding almost £200 a month to repayments on a £150,000 interest-only loan.
Skipton, with 100,000 borrowers, previously had guaranteed that its variable rate would not rise while Bank of England base rate stayed at 0.5 per cent, but it has cited a clause in its loans’ small print allowing it to ignore the promise in “exceptional circumstances”.
Skipton has blamed its decision on “unprecedented” competition in the savings market from National Savings & Investments (NS&I), the Treasury-backed savings provider, and state- controlled banks. Building societies have come to rely on funding from retail deposits for new mortgage lending as wholesale money markets stay frozen, but competition to attract savers has forced up the interest rates on offer, shrinking profit margins.

David Cutton, Skipton’s chief executive, said: “We are witnessing an extremely high cost of retail funding relative to the base rate, which has impacted our interest-rate margin over the last year. There is only a finite savings pot and building societies have faced tough competition over the last year from NS&I and banks, who continue to reduce their use of wholesale markets to fund new lending. This has driven up the cost of retail funding to an unprecedented level relative to mortgage rates.” Last year NS&I frequently appeared at the top of the best-buy tables for savings accounts. At present it is promising a 2.5 per cent return on its Direct cash Isa, compared with a promise of 2.25 per cent from Skipton on its online Isa account.
Experts say that other building societies are likely to follow suit and raise interest rates for homeowners on an SVR, the “revert” rate that borrowers switch to when a mortgage deal ends. David Hollingworth, of London & Country Mortgages, said the move was a “body blow” for Skipton borrowers.

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This election may be bad for my mortgage

Mortgage rates could rise this year even if Bank rate remains on hold well
into the autumn — and the government is to blame.

That was the warning last week from Simon Rubinsohn, chief economist at the
Royal Institution of Chartered Surveyors. His concern centres on gilts (UK
government bonds), which have been hit hard by uncertainty over how a Tory
or Labour government would tackle Britain’s £178 billion deficit.

This has pushed down gilt prices and yields (the interest as a proportion of
their price) up. This matters because mortgage rates in the wholesale
markets — where banks borrow to lend to you and me — are linked to gilt
yields.

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Beware the banks’ January bargains

Financial firms have joined retailers in offering January sales that promise
to save customers hundreds of pounds.

However, analysts say the sales are little more than a marketing ploy and
consumers would be better off with best buys rather than special offers. In
some cases, the deals are worse than the market average. In others,
providers’ market-leading products are excluded from their sales.

HSBC last week launched its sixth annual sale, offering discounts on mortgages
and savings until February 14. Leeds building society has discounts on some
mortgages this month and Halifax is offering additional rewards for
customers who have one of the bank’s current accounts. Fidelity, the fund
manager, is scrapping initial charges for 30 popular funds until February 1.

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Banks dominate best-buy tables as Building Societies raise rates

Alliance & Leicester was the most competitive mortgage lender over the
last three months, research released today has shown, as experts herald
burgeoning competition in the market for home loans.

The lender, which is owned by Santander, consistently offered competitive
interest rates to borrowers between October and December, according to an
analysis by realpricecomparison.com, the price comparison website. It looked
at the frequency that lenders appeared in its best-buy tables.

Online bank First Direct and its owner HSBC were the second and fourth most
competitive lenders respectively, the research found, while Woolwich, owned
by Barclays, was third.

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Call-up for Talk Talk

TALK TALK, the UK broadband and phone company, is to beef up its board with the appointment of the former chief of Orange UK ahead of the company’s split from Carphone Warehouse.
John Allwood will join the board of Talk Talk as a non-executive in preparation for its demerger, anticipated at the end of March.
Allwood will work alongside new chief executive Dido Harding, the former head of J Sainsbury’s convenience stores who was poached in December. Charles Dunstone, Carphone’s founder, will serve as executive chairman and John Gildersleeve, the Carphone chairman, will also become a non-executive.
Talk Talk, which acquired Tiscali last year, has more than 4.1m customers and is now the second-largest broadband provider in the UK after BT.

Talk Talk is being hived off from Carphone, whose retail stores have been put into a joint venture with Best Buy.
Allwood gained internet experience at Orange, which has its own broadband access business that traces its roots to Freeserve. He was managing director of Telegraph Media Group and deputy chief executive of Trinity Mirror. His most recent boardroom role was as finance chief of the pan-European newspaper group Mecom.
In January last year, he teamed up with fellow Mecom directors including former Woolworths chairman Richard North, to try to oust David Montgomery, the Mirror veteran, from the company. He quit after the plot fell apart.
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NS&I pulls popular fixed-rate bonds

National Savings and Investments (NS&I), the state-owned savings
institution, has withdrawn the last of its popular fixed-rate savings bonds
after reaching sales targets early thanks to surging demand.

NS&I introduced the range of bonds at the end of October, but withdrew the
one-year and two-year bonds less than a month later. It has now ceased to
issue its three-year and five-year bonds.

The growth bonds, in which interest is rolled up until maturity, shot to the
the top of several best-buy tables on financial comparison websites when
they were introduced.

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NS&I withdraws all its fixed-rate savings bonds

By Richard Evans

Published: 9:52AM GMT 11 Dec 2009

When NS&I relaunched
its range of fixed-rate bonds, which it calls Guaranteed Income
Bonds and Guaranteed Growth Bonds.

In October, it increased many of the interest rates dramatically, taking some
of the products to the top of the best-buy tables. For example, the one-year
savings bond paid 3.95pc.

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A flawed credit report meant we lost our dream home

Banks and building societies are cutting rates to meet lending targets before
the end of the year, but borrowers continue to miss out on the deals because
of flawed data from credit reference agencies.

Borrowers with good credit histories are having their mortgage applications
declined or delayed because of mistakes on credit files, with banks accused
of “laziness” for merely relying on data from the agencies.

Complaints about agencies have risen during the credit crunch, according to
the Information Commissioner’s Office, which adjudicates on disputes.

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Fame and fortune: Sally Gunnell

By Mark Anstead

Published: 4:13AM GMT 24 Nov 2009

Is there a reduced demand for your services because of the current squeeze?

Yes, I’m not earning as much at the moment because companies are cutting back
on events. I’m speaking at almost as many, but I’m charging less. My
response to the downturn has been to make myself available to those
businesses who might have previously found me priced beyond their budget – I
think you have to do that to maintain demand. And instead of concentrating
on motivational speaking I’m now adding personal training and coaching, so
I’ve added to my portfolio of skills. If you work for yourself you never
know what’s around the corner and you must keep reinventing yourself.

Have you been reviewing your expenses as well?

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