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koala_bear

Santander Restart Jumbo Mortgage Lending

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http://www.theguardi...mortgage-market

Santander returns to million-pound mortgage market

Bank says it will offer selected mortgages up to £1.5m, and a 'competitive range' of products up to £2.5m

High street banks are returning to the jumbo mortgage market, offering million-pound home loans for the first time since the credit crunch.Santander said it would make some of its standard mortgages available to customers who wanted to borrow up to £1.5m, and has launched a separate range of large loans for borrowers looking for up to £2.5m.

"We are seeing improved and buoyant conditions, so on Monday 28 October we are making some fantastic changes to our mortgage range to continue our support of the UK housing market," the bank's director of mortgages Phil Cliff said.

"We are extending the maximum loan size on selected mortgages to £1.5m and launching a very competitive range of new products for customers looking for a large loan up to £2.5m."

The changes mean that a borrower could achieve a £1.5m loan with a rate of 2.14%, although with a maximum loan-to-value of 70% they would need at least £1m to put down as a deposit and be able to afford monthly repayments of more than £10,000.

Rival Woolwich already offers mortgages in excess of £1m, and another mainstream lender is set to join the fray in the coming days.

Andrew Montlake of mortgage brokers Coreco said it was good to see mainstream lenders returning to the top of the market. "They were all there prior to the credit crunch, but when that happened they all pulled back massively. This will take the power away from the private banks, which is a good thing."

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "We have worked closely with Santander on the pilot and can vouch for its experienced underwriting team, which thoroughly understands this market.

"We expect other high street lenders to follow suit and increase their maximum loan sizes; indeed, we are working with another lender on a large loan pilot which launches on Tuesday."

Obviously missing out on all the action in London if they don't!

looks like most of the others joining the party soon as well.

Edited by koala_bear

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An exquisite collection of classic mortgages, individually handmade by master craftsmen using a variety of luxurious British Bailouts. Please click on the image for more details or to add an item to your basket.

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They just need to find borrowers who actually want jumbo mortgages, now all the cash-buyers/foreign money is bought in at high prices.

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The changes mean that a borrower could achieve a £1.5m loan with a rate of 2.14%

£1.5m loan at a negative real rate.

Astonishing

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They just need to find borrowers who actually want jumbo mortgages, now all the cash-buyers/foreign money is bought in at high prices.

Yes, that's not just a mortgage is it? :huh:

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£1.5m loan at a negative real rate.

Astonishing

I take it as evidence the assets are vastly over-priced. What's so astonishing trying to get people to sign up to more debt than something is worth, and likely to fall back in value towards.

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£1.5m loan at a negative real rate.

Astonishing

And how does that work out next year when the bond market collapses (see max keiser for details)

[edit]

Santander are just getting their foot in the door, magicking up some money so that later on they can repo some prime assets. Nothing more, nothing less. They are just attracting the greater, greater fool at those rates.

Banks are not in the business of giving stuff away.

Edited by Gone to Ireland.

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And how does that work out next year when the bond market collapses (see max keiser for details)

[edit]

Santander are just getting their foot in the door, magicking up some money so that later on they can repo some prime assets. Nothing more, nothing less. They are just attracting the greater, greater fool at those rates.

Banks are not in the business of giving stuff away.

I understand gubmint bond yields are through the floor, but I reckon you could be waiting a long time before they rise again.

As far as I know Santander UK has much better capitalisation than the Spanish parent.

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UK interest rates are coupled to that of the US & EU. As long creditor nations continue to trade in USD and buy US treasuries interest rates will stay down.

There is no way US rates will rise without UK rates rising. Would you invest your money in the UK at 3% when you could get better rates in the US.

Carney would have you believe that he is in control of the rates. He isn't! It's down to China continuing to buy US bonds and Saudi continuing to sell oil in USD. The second this stops then the game is up for the low interest rate regime.

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