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Bruce Banner

Cash I S A - It's That Time Of Year Again.

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Newcastle Big Home ISA is 3% AER, same monthly limit as the Nationwide...

It was good while it lasted. Having just dropped to 2.54% on the 9th March, another letter arrived today saying that it's going to drop to 2.00% from the 1st May.

Is this still market leading for instant access?

The HSBC 'Save Together' offer makes their HSBC Loyalty Cash ISA look like the most attractive option (from a very ugly group of options) for the 2015/16 contributions. £120 bonus plus some derisory interest on a £300 deposit.

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Looks like I jumped the gun. Having taken out a Santander 123 cash ISA 2 year fixed at 2%, I've just noticed that Leeds Building Society are offering 2.1% (balances over £15K) on a 2 year fix. Oh well, you can't win them all. Might benefit others though.

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The best I can find this year is a Virgin 3 year fixed rate ISA @ 1.75%.

Now dropped to 1.65%. Fortunately, we opened a couple before the rate dropped (with funding delayed until 6th April). 1.65% is still about the best around though. It's really come to something when 0.1% is significant.

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Looks like the Coventry 2.4 fix for 5yrs wasn't such a bad choice after all!

When was that?

Shawbrook Bank currently have a 5 year 2.25% fixed rate and Punjab National Bank have a 5 year 2.5%, both with full FSCS protection.

I'm still considering the Shawbrook offering but I'll probably stick with the Virgin 1.75% 3 year.

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Big drop in fixed rates in the last few days.

Virgin 3 year fixed rate ISA - Two weeks ago 1.75% - A week ago 1.65% - Now withdrawn.

Shawbrook 5 year fixed rate ISA - Last week 2.25% - Now 1.70%.

From the above it looks like they're expecting rates to fall. Perhaps I should have gone for the 5 Year Shawbrook offering at 2.25% instead of the 3 year Virgin at 1.75%.

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Big drop in fixed rates in the last few days.

Virgin 3 year fixed rate ISA - Two weeks ago 1.75% - A week ago 1.65% - Now withdrawn.

Shawbrook 5 year fixed rate ISA - Last week 2.25% - Now 1.70%.

From the above it looks like they're expecting rates to fall. Perhaps I should have gone for the 5 Year Shawbrook offering at 2.25% instead of the 3 year Virgin at 1.75%.

Have you read much about Shawbrook?

Challenger Bank Shawbrook wants to re-boot the interest-only mortgage market with new loans for pensioners, after a regulatory crackdown which almost wiped out the once-popular products.

As a result, there is little competition in the market, which matches Shawbrook’s model. To date the bank – as well as other challengers – has tried to focus on niche markets which the big banks deem too small or too risky to serve.

As a result it has achieved a return on equity of more than 25pc even as much bigger banks struggle to get above 10pc.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/12115672/Shawbrook-bank-to-launch-interest-only-mortgages-for-pensioners.html

Our mortgages can be used for the purchase of a new investment or to refinance an existing property or portfolio on a like-for-like basis or to raise additional funds.

We don’t restrict the number of properties that we lend on and will consider lending up to £15m to any one client.

As a specialist buy-to-let lender we support property investors by lending on a variety of residential investment properties that the high street lenders do not have an appetite for.

Unlike other lenders, we don’t restrict the number of properties held by an individual or held within a limited company, nor do we insist on you having a minimum income generated outside of your property portfolio – although we will check that your personal income covers your personal expenditure.

https://www.shawbrook.co.uk/commercial-mortgages/our-products/specialist-buy-to-let/

Edited by Democorruptcy

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Have you read much about Shawbrook?

No, not a lot, most of my reading on them was to get opinions of existing customers which was fairly positive. Had I gone with them it would have been a fairly small investment and one concern was a unique British banking licence to ensure the full FSCS protection. To be honest the main reason I decided against them was not wanting to commit to five years with a 360 day interest penalty as I'm hoping that rates may rise within that period. It's nigh impossible to find a bank that doesn't lend to BTL in some shape or form, Virgin certainly do.

I'm actually more concerned about what my considerable sum with NS&I is used for.

Edited by Bruce Banner

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The M.D of Shawbrook has impressed me on each of the 5 or 6 YouTube videos I've watched him in. Can clearly see why he's M.D.

He seems very intelligent. Not seen him shy away from covering risk aspects either, for BTLers. Also (not so much below) seen him answer some technical questions, correctly and with flow - I knew the answers were correct, but I would have had to spend time looking up the answers, if they'd been posed to me.

"(Re BTLers - 2014) You have to withstand shocks - well what does that shock look like.. well interest rates is a classic. Have to service your debt irrespective of whether property prices are going up or down". - "I've done some numbers, and whether these will shock people or not, but if you were paying 7% on your portfolio, and you were borrowing at 75% LTV, you would need to be getting about 6.6% gross yield just to pay the debt." - "House prices go down too.. so people talk about leverage as a one-way bet, you know your debt level won't go down but property prices can... and you'll have to service it no matter what happens to your property prices."

"One point I would like to raise is on the thread somebody said 'leverage will prevent repossession' ...-just to nip that in the bud that's not the case. There's a famous saying in lending 'Your First Loss Is Your Best Loss' - and with the regulatory environment that banks now operate in, you can't forbear unrealistically. If you've got an impaired loan, you have to act quickly to protect the bank or the lender's positions. So just because you're highly leveraged does not mean that a bank won't take possession so I think people need to be very very careful about..sort of reading that. I know that during the credit crisis when banks were very desperate to protect their capital, there was concern that banks were being too generous and forbearing too much because they didn't want to realise the losses - couldn't afford to realise the losses, the world's moved on from there and the regulatory environment and the capital environment is such that lenders have to act quickly and prudently, to protect their position. So it won't prevent possession and I think that's a dangerous road to go down."

It's a lending business and no one dragging anyone into borrowing - I expect that many lenders have weighed up the commercial risks, in the BTLing takeoff during last few years, and in most instances should have adequate security. All borrowers have to do is to make their repayments.

However, until recently I wouldn't have considered saving with them (given BTL involvement), but if things are set to cool in BTL - and hopefully wider property market - I quite like the idea of BTLers helping pay interest on my savings. Yet I've still not looked up what saving products they do.

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Looking at the one year ISAs available today the rates I saw were 1.3% at best for high street banks. Some less than 0.75%.

Their One year savings bond rates seem to have been slashed by about 20%. !

Are they counting on people thinking that accounts are now tax free (they are not though are they - it's just not deducted at source)? Or is this the new reality?

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NS&I index linked certificates are looking better now. March 2016 RPI 1.6%. Central banks desperate to ramp up inflation. Hedge against BREXIT risk. (I am thinking of the inflationary twist of a falling pound which has already started). I let some roll over recently and was worried I had shot myself in the foot but now thinking it was good indecision.

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Got the renewal letter on my Halifax cash ISA, offering 1.25%.

Thought I might as well, there aren't many better offers around and, as I am a renter, I can't be bothered opening new accounts and providing proof of address for last three years etc.

Reading further it appears their generous 1.25% is based on a two year term. No offer at all for one year. Other option they give is 2% for 5 years.

Now, as we are living in uncertain times economically I don't wish to leave it there for two or five years. I would like to do what I have done every year, reconsider after 12 months and, what usually happens is, I reinvest it with them for a further 12 months.

Should I need the cash out before end of 2 years there's a 180 day interest penalty!

Why no 12 months ISA anymore?

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Danske Bank offering 1.6% easy access. FSCS protection.

Might go for it.

BM have just hoofed me off a 5 year fix and now dont offer ISAs at all!

I've just spoken to Danske Bank and you need to be a resident of Northern Ireland to open an ISA with them.

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I've just spoken to Danske Bank and you need to be a resident of Northern Ireland to open an ISA with them.

OK thanks.

DId wonder why it wasnt showing on MSE etc, as its one of the better easy access rates going.

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On 05/03/2019 at 12:39, Bruce Banner said:

Best I could find this year is Coventry BS 2.3% on a 5 year fix.

180 days loss of interest for early withdrawal. Easy to open online, no dramas.

2.3% until 2023 now so bit less than 5 years.

If their BTL calculator is anything to go by they might be tightening up lending for anything above 80% LTV.  https://www.coventrybuildingsociety.co.uk/consumer/mortgages/buy-to-let/mortgage-rates.html

Might be wrong on the lending bit. Others like SpyGuy might know more.

Edited by Arpeggio

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On 05/03/2019 at 12:39, Bruce Banner said:

Best I could find this year is Coventry BS 2.3% on a 5 year fix.

180 days loss of interest for early withdrawal. Easy to open online, no dramas.

5 years for 0.3 more than BMI will offer for 1 year ?? Is there any point.

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