Hotproperty brings you the latest trends and deals in today’s fast-moving mortgage marketplace.
UK wakes up to offset mortgages
Awareness of offset mortgages among home owners has doubled since the spring, according to First Direct. The latest survey shows that 45 per cent of homeowners are aware of offset mortgages, up from 20 per cent in early 2003. The highest awareness is in London, where 56 per cent of home owners claim to have heard of offset mortgages (where the interest on your mortgage is reduced by funds in your separate saving and current accounts).
Alan Hughes, chief executive of First Direct, said: ‘A mortgage is probably the single biggest expense people have and it’s certainly good news that more people know they could save thousands of pounds each month by choosing an offset mortgage.’
Housing market surges
The British Bankers' Association reports that the value of mortgages approved last month rose to 80 per cent above the level reached last year. The dramatic rise has been attributed in part to first-time buyers returning to the market.
House price rises of around 28 per cent per year recorded at the start of the year have cooled, but a rise in new mortgage approvals of 39 per cent last month suggests that price rises may spiral upwards again. The average mortgages size is £111,900, up 29 per cent compared to October 2002. Remortgaging continues to drive the market forward with the number of loans 32 per cent higher than a year previously.
In a fix
The Market Harborough Building Society (MHBS) is currently offering a new two-year fixed deal with an interest rate of 3.25 per cent. With a maximum loan-to-value (LTV) of 90 per cent, the maximum that can be borrowed is £500,000 and the minimum £35,000. This mortgage can be tracked using MHBS’s unique online Mortgage Application Tracking System.
Other mortgages offered by MHBS include a lifetime stepped discount deal, with a three per cent discount in year one, a two per cent discount in year two and a one per cent discount for the remainder of the loan. The base interest rate is 2.74 per cent in the first year (APR 4.74 per cent), with 3.74 per cent in year two and 4.74 per cent for years three onwards. A minimum pay rate of four per cent will be applied from year three. Flexible options include payment holidays, drawdown facilities and a rate selection facility (the latter not available during the fixed-rate period), and the LTV is a maximum of 80 per cent. For further details about these or other MHBS products visit website mhbs.co.uk.
First port of call
Portman Building Society is now offering a wide range of fixed-rate mortgages, including a two-year fixed deal at 1.99 per cent (5.4 per cent APR, fixed until 1 December 2005), with the facility to make part repayments of up to five per cent of the original amount borrowed, without incurring any repayment fees, for each full twelve month period from completion of the loan until 1 December 2005; a five-year fixed deal at 5.25 per cent with the same benefit as above (until 1 December 2008); and a two-year fixed deal at 4.25 per cent (5.7 per cent APR fixed until 1 December 2005), with a ten per cent part repayment facility. For further details visit website portman.co.uk.