Uk Mortgage Battle Hots Up As Banks Prepare To Slash Rates

[kjw]

The battle to tempt mortgage customers with attractive deals is heating up again as major lenders put more rate cuts into action.

Barclays is preparing to offer what it said are some of its lowest ever rates, including a three-year fixed rate at 2.29%, a five-year fix at 2.85% and a 10-year fix at 3.49%.

All of these deals are aimed at people with 40% deposits and come with a £999 fee.

Barclays is also cutting the rate on its innovative family springboard mortgage, which helps people with only a 5% deposit get on the property ladder by allowing their parents to put some money into a savings account which is then linked to the mortgage. [more at link... ]

http://www.theguardian.com/money/2014/oct/19/mortgage-battle-hots-up-as-banks-prepare-to-slash-rates

[The Masked Tulip]

IRs are not going up so they can now go back to offering more and more mortgage cash.

[Sancho Panza]

The only problem is finding people who want to borrow that much and/or have the requisite deposit.

[long time lurking]

They smell a collapsing ponzi scheme on the horizon with a side order of deflation

[Wurzel Of Highbridge]

I will be re applying for a first direct 1.99% tracker next month. Let's see if they will let me take out a £125k 50% LTV loan on a joint salary of £55k+ this time as they wouldn't in May. We have no debt to take into account and very little circumstance change, so it will be good to see if the underwriting standards are slipping.

Last time we applied in May the rate was 2.19% tracker, coupled with the local price drops of around £20k we are on a winner compared to 6 months ago. Might well hold off until after May anyhow, plus lots more stock will come to market in March.

[Bloo Loo]

and where are they getting this cheap cash from?

oh yeah, they sign up for another 25 year deal...

God where are the pensions going to come from?

[winkie]

WE NEED YOUR DEBT....your debt helps the recovery.....please give what you can.

[ohdear_kids]

I got tired of waiting and placating the GF, and we bought recently. I don't know what this "toughening mortgage rules up" actually amounted to, but it seems to have done nothing when I appled. I fixed for 10 years at 3.89% borrowing 2.5x joint salary, and now regret going for 10yrs as I thought rates would go up end of this year. Anyway, not only were we approved in <30mins (we have no debt, sparkling credit score, low LTV etc etc), but there were no questions about outgoings or delving deeper into whether we could actually afford this. All they did was talk about whether this mortgage was the right one for us, look at payslips as proof of income, then run a credit check, and we were done.

That sounds great right? I mean from a personal point of view as we obviously wanted the mortgage to be approved, but the "advisor" did 2 things that REALLY p*ssed me off:

1) Kept mentioning/asking what we will do if one or both of us becomes ill/unable to work, and do we have a plan, and effectively trying to get us to take out PPI in all but name. I told her it wouldn't happen, and if it did we had savings etc, but she kept labouring the point, to the level where I said "I would sell the damn house if it got that desperate!!". Then she finally shuttup about it.

2) Trying to lend us MORE money! I thought the days of massive, unsustainable mortgages were gone! We had done our sums, and made sure our mortgage was affordable for us with bills, unforseen costs etc, and we only wanted 2.5x salary. She kept going on about "do you like the bathroom? What about the kitchen? Would you want to change it? It's cheaper to borrow against the house now then take out a loan later". She told me we could actually borrow up to £X, which was 5.5 times our salary! When I asked "how can people even live paying that much back each month on our salaries?" she shrugged and said "they seem to find a way".

Left feeling relieved it was so easy and we were approved and we now have the house, but quite angry that it seems NOTHING has changed with the UKs biggest "industry".

Sorry for the rant.

[winkie]

and where are they getting this cheap cash from?

oh yeah, they sign up for another 25 year deal...

God where are the pensions going to come from?

They come from the house you were buying but never paying for....continue paying for the capital, whilst the growth pays for itself.

[winkie]

Cross selling........you need/want something, end up buying what you don't/want need to get the one and only thing you want/need...

[spyguy]

I got tired of waiting and placating the GF, and we bought recently. I don't know what this "toughening mortgage rules up" actually amounted to, but it seems to have done nothing when I appled. I fixed for 10 years at 3.89% borrowing 2.5x joint salary, and now regret going for 10yrs as I thought rates would go up end of this year. Anyway, not only were we approved in <30mins (we have no debt, sparkling credit score, low LTV etc etc), but there were no questions about outgoings or delving deeper into whether we could actually afford this. All they did was talk about whether this mortgage was the right one for us, look at payslips as proof of income, then run a credit check, and we were done.

That sounds great right? I mean from a personal point of view as we obviously wanted the mortgage to be approved, but the "advisor" did 2 things that REALLY p*ssed me off:

1) Kept mentioning/asking what we will do if one or both of us becomes ill/unable to work, and do we have a plan, and effectively trying to get us to take out PPI in all but name. I told her it wouldn't happen, and if it did we had savings etc, but she kept labouring the point, to the level where I said "I would sell the damn house if it got that desperate!!". Then she finally shuttup about it.

2) Trying to lend us MORE money! I thought the days of massive, unsustainable mortgages were gone! We had done our sums, and made sure our mortgage was affordable for us with bills, unforseen costs etc, and we only wanted 2.5x salary. She kept going on about "do you like the bathroom? What about the kitchen? Would you want to change it? It's cheaper to borrow against the house now then take out a loan later". She told me we could actually borrow up to £X, which was 5.5 times our salary! When I asked "how can people even live paying that much back each month on our salaries?" she shrugged and said "they seem to find a way".

Left feeling relieved it was so easy and we were approved and we now have the house, but quite angry that it seems NOTHING has changed with the UKs biggest "industry".

Sorry for the rant.

Can you link to the mortgage + bank?

I'm not saying you are fibbing but all mortgages issued since March tend to have income and outgoings checked.

You account of 30 minutes and only checking pay slips just does not happen anymore.

I'd like to a low fix for more than 10 years but i struggle to find any more than 5 years. Again, link to mortgage please.

[ohdear_kids]

Can you link to the mortgage + bank?

I'm not saying you are fibbing but all mortgages issued since March tend to have income and outgoings checked.

You account of 30 minutes and only checking pay slips just does not happen anymore.

I'd like to a low fix for more than 10 years but i struggle to find any more than 5 years. Again, link to mortgage please.

I don't know why you are struggling to get a 10yr, there are loads out there.

Though the fact you are called "spyguy" and I am a proper tin foil hatter when it comes to the internet worries me.

Anyway, on trust, here you go

http://www.barclays.co.uk/Mortgages/Fixedratemortgages/P1242557963470

Top one, 10 year fix.

It's gone up to 3.99% now though.

[Bloo Loo]

I got tired of waiting and placating the GF, and we bought recently. I don't know what this "toughening mortgage rules up" actually amounted to, but it seems to have done nothing when I appled. I fixed for 10 years at 3.89% borrowing 2.5x joint salary, and now regret going for 10yrs as I thought rates would go up end of this year. Anyway, not only were we approved in <30mins (we have no debt, sparkling credit score, low LTV etc etc), but there were no questions about outgoings or delving deeper into whether we could actually afford this. All they did was talk about whether this mortgage was the right one for us, look at payslips as proof of income, then run a credit check, and we were done.

That sounds great right? I mean from a personal point of view as we obviously wanted the mortgage to be approved, but the "advisor" did 2 things that REALLY p*ssed me off:

1) Kept mentioning/asking what we will do if one or both of us becomes ill/unable to work, and do we have a plan, and effectively trying to get us to take out PPI in all but name. I told her it wouldn't happen, and if it did we had savings etc, but she kept labouring the point, to the level where I said "I would sell the damn house if it got that desperate!!". Then she finally shuttup about it.

2) Trying to lend us MORE money! I thought the days of massive, unsustainable mortgages were gone! We had done our sums, and made sure our mortgage was affordable for us with bills, unforseen costs etc, and we only wanted 2.5x salary. She kept going on about "do you like the bathroom? What about the kitchen? Would you want to change it? It's cheaper to borrow against the house now then take out a loan later". She told me we could actually borrow up to £X, which was 5.5 times our salary! When I asked "how can people even live paying that much back each month on our salaries?" she shrugged and said "they seem to find a way".

Left feeling relieved it was so easy and we were approved and we now have the house, but quite angry that it seems NOTHING has changed with the UKs biggest "industry".

Sorry for the rant.

all sounds so easy...2.5 x joint, plenty of savings...i guess you are earning a little more than the average wage.

[ohdear_kids]

all sounds so easy...2.5 x joint, plenty of savings...i guess you are earning a little more than the average wage.

Sorry, please don't take offence at what I said. Yes, we do ok. The point I was making is that NOTHING seems to have changed and no lessons have been learned. My intent wasn't to make others feel bad just because I bought a house, hence why I omitted all figures. Different people earn different salaries, have different circumstances etc.

My intent was to say that all the bad practices I have read about (pushing high salary multiples, scaring people into taking out PPI, not doing proper due dillegence) just seem to be there still as they always have. I am not some millionaire that can buy a house outright: I had to save up ( a lot), rent for 10 years, and had to get a mortgage. I was just reporting on the shocking experience I had where everything that is said on these forums, but not in the mainstream press, is true and still alive.

Apologies once again if I somehow offended anyone that is struggling to partake in the UK housing "industry". It sickens me that I have to take part in it, but I need a roof over my head and a place to bring up kids.

[bankstersparadise]

Can you link to the mortgage + bank?

I'm not saying you are fibbing but all mortgages issued since March tend to have income and outgoings checked.

You account of 30 minutes and only checking pay slips just does not happen anymore.

I'd like to a low fix for more than 10 years but i struggle to find any more than 5 years. Again, link to mortgage please.

Anything fixed for 5 years plus is MMR exempt.

[winkie]

[DarkHorseWaits-NoMore]

...Apologies once again if I somehow offended anyone that is struggling to partake in the UK housing "industry". It sickens me that I have to take part in it, but I need a roof over my head and a place to bring up kids.

Good to hear your info. I also fixed for 5 years (last year 3.09% 75% LTV) and for the the same feelings and reasons as yourself. Guess we'll all get to see what happens...

[RentaBear]

Can you link to the mortgage + bank?

I'm not saying you are fibbing but all mortgages issued since March tend to have income and outgoings checked.

You account of 30 minutes and only checking pay slips just does not happen anymore.

I'd like to a low fix for more than 10 years but i struggle to find any more than 5 years. Again, link to mortgage please.

As soon as you say you want a 5+ year fixed on a repayment basis, they don't give a toss about how much you spend on steak or cinema trips. And we were asked 'are you sure that's all you want - you can have 4.3x joint...'

We had a 3 hour 'interview' - 2.5 hours of which were them trying to sell us life insurance (with payment protection!) at a total premium of 25% of the loan!

[spyguy]

OK, I withdraw my doubt.

I was unaware the MMR is NA for 5 year fixed.

I have to say, the fees are pretty high on that 10 year.

I end to use First Direct as a base - they have money to lend and they are pretty sane on risk.

They do not offer 10 year fixes.

But as I said on another thread, you would not go to FD if you earn less than 50K and do not have at least 30% deposit.

[ohdear_kids]

OK, I withdraw my doubt.

I was unaware the MMR is NA for 5 year fixed.

I have to say, the fees are pretty high on that 10 year.

I end to use First Direct as a base - they have money to lend and they are pretty sane on risk.

They do not offer 10 year fixes.

But as I said on another thread, you would not go to FD if you earn less than 50K and do not have at least 30% deposit.

£1500 over 25 years is insignificant really. I didn't know the MMR stuff is applicable to 5 yrs or less either. It explains part of my experience, but not the pushing of PPI and higher multiples.

[davidg]

> no lessons have been learned.

Oh yes they have, the learned lesson is the tax payer will bail out any bank that lends recklessly, so fill yer boots.

Edited October 19, 2014 by davidg

[Wurzel Of Highbridge]

> no lessons have been learned.

Oh yes they have, the learned lesson is the tax payer will bail out any bank that lends recklessly, so fill yer boots.

Exactly, await the spring 100% LTV ramping from Cameron.

Help-To-Buy 3 no deposit required.

[moneyfornothing]

Anything fixed for 5 years plus is MMR exempt.

hahahahahaha... Nice little loop hole... So guess which type of loan the banksta will want to steer customers to .. Did they bribe anyone to leave this loophole open

[Venger]

hahahahahaha... Nice little loop hole... So guess which type of loan the banksta will want to steer customers to .. Did they bribe anyone to leave this loophole open

Remaining customers in this market are steering themselves to the lenders, when they choose to have anything to do with them vs these house prices. All people have to do is look at the house prices.

They are cutting the mortgage interest rates simply because they are running out of customers. Banks will try and sell you money at an inappropriate time, but the banks will still require quite some assurance you are on the hook for the debt going forwards even with the 5 year.

(Perhaps not so much at the lower end where I'm seeing hints of new weakness in Greater Manchester - in areas typically where most BTL types would look to invest - so much for the ripple). Low-mid-high prime still seeing last dregs of "It's not earning anything in the bank" and paying crazy prices for base level quarter million pound houses from elderly to turn into rentals.

My brother and sister are in senior positions at top firms in Manchester; with most of their colleagues of the same standing and age range totally priced out too (30-40). Even if they could buy house at these prices and massive debt + no money spend on themselves, against global monetary tightening and slowdown?

We are surrounded by average houses asking £400K - £500K. Where are these elderly owner-sellers going to continue finding buyers from? The diminishing pool of solvent buyers who can over-reach for them, when rates cut to attract last of dumb money?

http://www.rightmove.co.uk/property-for-sale/property-46636987.html

http://www.rightmove.co.uk/property-for-sale/property-31878453.html

When remaining buyers/upsizers are outbidding my family by quarter of a million pounds+, for a house we would want to buy, that is their own decision. They steered and drove themselves into it above others.

Low-mid-high prime owners are staring into an abyss, but most do not realise it yet. Looking forward to more owners who are going into care/inheritors going for auction route. The crash has begun, in my opinion.

Apologies once again if I somehow offended anyone that is struggling to partake in the UK housing "industry". It sickens me that I have to take part in it, but I need a roof over my head and a place to bring up kids.

Well enjoy your new house and mortgage.

[bankstersparadise]

I end to use First Direct as a base - they have money to lend and they are pretty sane on risk.

They do not offer 10 year fixes.

I think they see them as too risky.

Selling someone a 10 year fixed rate is the same as selling someone a conventional tracker and an interest rate swap. The problem is all the corporate lenders have just got massive fines for doing that for corporate clients last cycle.

These guys selling 10 year fixers for 300bps over the base rate and 150bps over the trackers could look very bad ex-post if in 8 years time we have -150bps move in the base rate. If I was FD I would be waiting for the government to start pushing banks into it so there is no recourse when/if it goes wrong.