With the number of available mortgages continuing to grow, we take a look at what's hot in the mortgage market in September.
65% LTV: Norwich & Peterborough
On Friday, the Norwich & Peterborough Building Society will reduce the rate on its already impressive 65% LTV two-year fixed-rate mortgage from 2.19% to 1.99% as it seeks to make further gains in the lower-risk mortgage sector.
The fee of £295, which will remain unchanged, offers terrific value compared to similar products in this sector. It has already made the mortgage a very strong competitor in the market for lower value loans, which is shown in our guide to mortgage arrangement fees.
Norwich & Peterborough, 1.99% for 2 years, max 65% LTV, fee £295.
(Effective Friday 13th.)
Also check out: Yorkshire Building Society, 1.99% for 2 years, max 65% LTV, fee £845.
75% LTV: Post Office
Amid a full refresh of its mortgage portfolio this week, the Post Office has improved its 75% LTV two-year fix to just 1.98%.
The £995 fee remains some distance below the lofty sums charged by Accord and the Chelsea BS, making the new Post Office deal among the most competitive products for this loan-to-value.
Post Office, 1.98% for 2 years, max 75% LTV, fee £995.
(Effective Thursday 12th.)
Also check out: Barnsley Building Society, 2.09% 2 year tracker, max 75% LTV, fee £845.
80% LTV: Loughborough Building Society
Keeping under the radar - rather unfairly - is a three-year fix by the Loughborough Building Society, which was launched at 2.89% this week for a maximum loan-to-value of 80%.
The rate is marginally higher than the cheapest deals on the market for this sector (e.g. Post Office, 2.84% / £995; Accord, 2.84% / £845; Leed Building Society, 2.85% / £199), but given a fee of just £299, a re-mortgage legal cost rebate and a revaluation fee refund, it proves excellent value compared to its close rivals.
Loughborough Building Society, 2.89% for 3 years, max 80% LTV, fee £299.
(Already for sale.)
Also check out: Leeds Building Society, 2.85% for 3 years, max 80% LTV, fee £199.
90% LTV: Hinckley & Rugby Building Society
Another Leicestershire society, Hinckley & Rugby, is among the front-runners for high loan-to-value mortgages. A tracker mortgage at 90% is available at 3.75% for two years for a fee of £295.
The Bank of England's recent forecast that the base rate is unlikely to rise until 2016 should offer some security in a short-term tracker deal at this time. Nevertheless, buyers interested in this mortgage will need to ensure that they could afford an extra 0.25% or 0.50% in case of any unexpected changes to the base rate occur over the coming two years.
Though HSBC offers a lower headline rate for this loan-to-value (3.59%), the £1,499 fee is a hefty addition and is unlikely to provide the best value for money given the size of the loans that will be advanced to first-time buyers.
Hinckley & Rugby only charges property assessment fees where the valuation exceeds £1 million, while it also offers free admin fee for remortgage arrangements.
Hinckley & Rugby Building Society, 3.75% 2 year tracker, max 90% LTV, fee £299.
(Already for sale.)
Also check out: Monmouthshire Building Society, 3.75% 3 year tracker, max 95% LTV, no fee.
Keith McDonald
Which4U Editor
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