Residential mortgage market revitalised by record low rates and new product ranges

Written by Jeni Browne

HSBC launches two-year fixed rate mortgage, while Kensington introduces a high value Premier range for homebuyers needing to borrow more than £500,000 and Virgin Money encourages more of its customers to use brokers.

HSBC has launched a low two-year fixed rate mortgage, available to buyers with a 35% deposit.

The product, which HSBC says is currently the lowest on the market, carries a £1,499 product fee and is available for purchases and remortgages.

The deal also allows customers to overpay up to 10% of the mortgage balance per year without incurring early repayment charges.

Halifax Intermediaries is offering first-time buyers £500 cashback on certain deals and has cut rates on its first-time buyer range.

Customers looking for 85-90% loan-to-value (LTV) mortgages will be able to access rates of 1.79%(3.8% APRC) with a £1,499 fee, 1.84%(3.8% APRC) with a £999 fee and 2.24%(3.8% APRC) fee-free.

Cashback of £500 will be sent to the conveyancers with completion funds.

The lender has made cuts of up to 0.30% to its two-year fix and 0.10% on its five-year fix selected mortgage products.

Targeting borrowers with complex incomes and high service expectations, Kensington Mortgages has launched a range of high-value loans called ‘Premier’.

Available to borrowers looking for loans above £500,000, the new range extends to loans of up to £2m, with a cut-off of £1m for first-time buyers.

Two-year fix mortgages have rates of 3.44%(4.9% APRC) and three-year fix mortgages come in at 3.74%(% APRC), both for loans up to a maximum of 75%.

Up to 65% LTV rates are 3.64%(4.9% APRC) for a three-year fix. All products carry a £999 completion fee.

The loans are also available on an interest-only basis and Kensington will accept applications from customers who have a range of income sources, such as company profits for sole directors.

Another lender to launch a new range of residential mortgages is Accord Mortgages. Its just-released range of three-year fixed rate mortgages is available for house purchase or remortgage.

Borrowers with a 10% deposit can access its three-year fixed rate of 2.64%(5.2% APRC) or an offset mortgage at 2.84%(5.2% APRC).

Three-year fixed rate deals at 2.04%(5% APRC) or 2.24%(5.1% APRC) for offset mortgages will be available to borrowers looking for 80% LTV deals.

The lender, which is part of Yorkshire Building Society, has also reduced the rates on its 75%, 80%, 85% and 95% LTV mortgages for purchase and remortgage.

The cuts include a 0.15% reduction on two 90% LTV two-year fixes, now available at a rate of 2.29% (5.4% APRC) or an offset offering at 2.49%(4.7% APRC).

A fee of £845 applies to all the above deals.

Meanwhile, Saffron for Intermediaries has introduced interest-only payments on its occupational mortgage range, which is available up to 70% LTV.

The intermediary only lender, which specialises in loans for the self-employed, contractors and professionals (such as doctors, lawyers and accountants), is now offering customers the option to make repayments on an interest-only basis.

The lender has also reduced its minimum applicant age to 21 and has extended loan caps from £500,000 to £1m for first-time buyers living within the M25, up to a maximum of 90% LTV.

Lastly, Virgin Money will be launching simpler product switching and is to offer brokers a procuration fee for retention business.

The fee will form part of Virgin Money’s new online system, which allows brokers to compare mortgages at the retention stage.

The system, which is to launch in late June or July, will give registered brokers better access to content helping customers to make a considered decision as to whether they’re better off going somewhere else or staying with Virgin Money.

Given that 75% of transactions are done through intermediaries, Virgin Money says it is hoping to make it easier for intermediaries to do business with them and is encouraging its customers to use brokers.

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