Wednesday, May 6, 2009

Offers best-buys to borrowers with a 30% deposit

Barclays introduces cheapest tracker

Barclays will introduce the cheapest base-rate tracker on the market, at 1.99% above base, a pay rate of 2.49%. The best-buy deal is only available to cash-rich borrowers with a 40% deposit who need to borrow at least £200,000, and comes with a £1,499 fee. The lender is also reducing the cost of other deals by up to 0.7 percentage points. A two-year fix with 20% deposit is now 4.99% + £999 fee. A two-year fix with 15% deposit is 5.69% [plus unspecified fee]. Barclays said that the rate reductions were due to a fall in swap rates, the wholesale money markets which banks use to fund new fixed-rate mortgage lending. [Question is, how strictly will they value the properties? 85% LTV based on peak valuations, today's lower valuations, or next month's even lower valuations?]

Posted by drewster @ 01:57 AM (632 views)
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One thought on “Offers best-buys to borrowers with a 30% deposit

  • 199bps is a bigger margin than used to be charged at the mortgage provider I worked for many years ago (always used to target 150 bips). And besides, barclays knows the score. INterest rates will inevitably rise and they will make considerably more than 199 bips margin in the not too distant future. Bet they don’t have any long term fixed rates anywhere near 2.49.

    And that’s before we get into the massive fee and equity requirements!

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