Monday, October 27, 2014

Only the beginning

Nationwide to launch its lowest ever fixed rate at 1.74%

Nationwide Building Society has launched a new range of mortgage rates including its lowest-ever fixed rate deal at 1.74 per cent. The new two-year fixed rate is available up to 60 per cent LTV and offered at 1.84 per cent for new customers, while existing Nationwide mortgage borrowers are offered a rate of 1.74 per cent. A £999 product fee is attached, reduced to £499 for first-time buyers. A new five-year fix available up to 60 per cent LTV is priced at 2.84 per cent for new borrowers and 2.74 per cent for existing mortgage customers. A 75 per cent LTV two-year tracker is being launched at 1.44 per cent for new customers and 1.34 per cent for existing customers. Both products carry a £999 product fee, reduced to £499 for first-time buyers.

Posted by libertas @ 01:37 PM (2621 views)
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13 thoughts on “Only the beginning

  • 1.34% !! That is £2680 interest payments on a £200k mortgage !!

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  • does anyone want to borrow money, it looks like banks can’t give it away

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  • what was that…pushing on a string?

    You still need a VERY hefty mortgage – and how long will the teaser rate last for?

    Most people will still be disqualified from buying.

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  • They aren’t going to sell more mortgage by slashing the rates because each and every application is stress tested to mortgage rate +3% under the MMR legislation.

    “When assessing affordability, mortgage lenders should apply an interest rate stress test that assesses whether borrowers could still afford their mortgages if, at any point over the first five years of the loan, Bank Rate were to be at least 3 percentage points higher than the prevailing rate at origination.”

    So your 1.74% nationwide mortgage will have the repayments stress tested to a minimum of 4.74%, average house price of £274,000 (August 2014 ONS) give a minimum stress test repayment of £1,428 per month.
    Average salary is £26,500 or £1,747.89 take home, even at 1.5 working people per household approval for such mortgage is impossible.

    So to get mortgage approvals back to pre-may rates will need to come down at least 3% for borrowers to be able to pass the affordability test.

    And then there’s the regulation of BTL that will be introduced shortly.

    All that said, the peak of this election bounce (as called out in the forum) was January and a picture speaks a thousand words and clearly mortgage approvals are on a downward trend until interest rates fall – oops.

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  • From the comments section of the article (bearing in mind it’s an industry publication)

    David Dann | 23 October 2014 10:09 am

    Nice rates, shame the property market is over priced.

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  • closed!

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  • Oh dear what have I done ?

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  • closed (again!)

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  • hhahahaha I think you must have cut and paste a lot of HTML too.

    Try and paste into notepad first, then all the formatting will be removed!

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  • Thanks hpw (my laptop skills are legendary)

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  • ———————

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