Mortgage News Articles

There’s a mixed outlook for homeowners and home buyers this week. Those with mortgages are paying them off at the quickest rate for more than a year  while those trying to get mortgages are facing serious struggles.

British homeowners paid a total of £6.2 billion towards their mortgages between April and June, newly released figures show. That’s the highest three-month total since January-March 2009. The added expenditure appears to be the result of consumer confidence taking a knock thanks to the poor economy and the expected results of government spending cutbacks. Consumers are taking money they’d normally have spent in the shops and put it towards paying off major debts instead.

Meanwhile the Bank of England has warned that getting Read Full Story

Rumored European legislation could give mortgage customers a ten day cooling-off period after agreeing a loan. It's designed to give homebuyers more opportunity to shop around for the best deal, but the UK mortgage industry says the rules are unnecessary.

The European proposals won't be published for consultation until early next year, but the Council for Mortgage Lenders says officials are considering a compulsory "reflection period" after a mortgage is agreed in principle, during which customers can change their mind. The idea is to encourage people to look for a better deal during this time rather than rush into a mortgage.

According to the CML, this is largely irrelevant in the UK because most people use a mortgage broker, who will already shop Read Full Story

Just six lenders now make up more than 90% of the UK mortgage market. It makes it even more important for would-be home owners to shop around for deals.

New figures from the Council of Mortgage Lenders show a major contraction in market competition. The top six lenders (Lloyds, Santander, RBS, Barclays and HSBC) now have a combined market share of 92.2%, compared with 79.4% two years ago.

That's down to a combination of banking groups carrying out takeovers, and traditional building societies failing to grow their business, partly through a lack of funding. The CML also described the mortgage activities of non-banks as "comatose" and warned that the market breakdown will not change soon.

To Read Full Story

A mortgage company has unveiled a tracker mortgage that comes with an option to switch to a fixed-rate without penalty.

The firm behind the deal, Principality, says it is aimed at buyers who are confused about contradictory forecasts over interest rate movements and are wary about taking risks given the financial climate. Marketing director James Wright said that while some financial experts predict low rates for the foreseeable future, other economists are pegging an 8% rate within two years.

The deal is for a three-year variable rate at Bank of England base rates plus 2.49% (meaning 2.99% at the moment). The deal automatically switches to Principality's variable rate (currently at 4.99%) after Read Full Story

The number of mortgages approved in the UK has fallen for a second straight month and is close to dropping below 1,000 a day. The figure for July is down nearly a fifth from the same time last year.

Although mortgage rates are still low, the best deals generally require high deposits, up to 25% in some cases. That cash requirement, plus consumer concern over job losses has meant more people are choosing to stick to renting rather than buying.

The BBA noted that there are more houses available for sale (which has been linked to the removal of Home Information Pack requirements), and there's been a slowdown in price rises, but this hasn't been enough to tempt new mortgage holders.

In turn that's putting pressure on rents: over the past quarter the Read Full Story

Mortgage lenders are making their highest ever profit margins on individual loans according to new statistics.

Figures quoted by Moneyfacts say the difference between the average mortgage rate and the rates banks pay to borrow money themselves is now 3.29%, a margin that has doubled in the space of two years. That's enough to outweigh the trend for a small decrease in the rates customers pay.

One reason for this appears to be a slowdown in lending. Because banks and building societies are more hesitant to take on new customers at a time when job cuts look likely, the rates on offer remain higher than if lenders were engaged in fierce competition.

It appears borrowers believe rates could rise from current levels. Since the start of this year, the proportion Read Full Story

Self-certification mortgages look set to be banned under a Financial Services Authority crackdown on the home lending market.

The FSA is planning to tighten the requirements that lenders check borrowers are able to afford repayments on mortgages. It comes as the regulator found there was such a disparity between loans and incomes that 46% of house holds are left with no money after mortgage repayments and living costs.

The new rules wouldn't mean that people without a fixed salary, such as the self-employed, would be barred from getting a mortgage. However, they would have to offer more conclusive evidence of their income rather than the lender simply taking them on their word.  FSA research shows that Read Full Story

The Financial Services Authority has announced that all mortgage advisers will be more accountable in future.

The new rules, which take effect from next March, mean that both independent mortgage advisers and bank staff which give mortgage advise will have be registered with the FSA. As well as proving they are "fit and proper", the advisers will have to show they meet a minimum level of competency and agree to follow an FSA code of  ethics.

The authority has also brought in tighter controls on how lenders treat people who are in arrears. The changes mean firms can't apply an arrears charge once there's an agreement to pay off the arrears, and that the borrower's payments are put towards the arrears first, rather than any charges Read Full Story