Mortgage market update - Tracker rates offering better value than fixed rates

The Bank of England MPC recently announced no change to the UK Base Rate which continues to remain at its historic low 0.50%. Most forecasters indicate that we could see UK Base Rate remain around its current level for next 12-18 months and possibly beyond.

Due to the way the UK Financial Markets are currently operating, Mortgage Lenders are offering the most competitive rates where the deposit/equity is 25% or more. Additionally, Tracker Rates are generally priced around 1% lower than most comparable fixed rates.

Please see below residential mortgage product which has just been launched for purchase and re-mortgage business.

• TRACKER RATE 2.79%......UK BASE RATE PLUS A MARGIN OF 2.29% FOR TERM OF MORTGAGE
• MAXIMUM LOAN TO VALUE 70%
• £999 LENDER ARRANGEMENT FEE ADDED TO MORTGAGE
• REDEMPTION PENALTY 1% UNTIL 31.01.2012. NO PENALTY THEREAFTER.
• FACILITY TO MAKE LUMP SUM PAYMENTS UP TO 10% PER ANNUM
• INTEREST ONLY ALLOWED
• FREE VALUATION AND FREE LEGAL FEES FOR RE-MORTGAGES.

This deal may appeal if:

1.    You are coming to the end of your current deal.
2.    You are currently paying Standard Variable Rate.
3.    You are on a fixed rate with a reasonable redemption penalty
4.    You are looking to raise capital at a cheap rate perhaps to consolidate other borrowing or for home improvements.
5.    You wish to raise a deposit for a Buy to Let purchase.

Should we see a dramatic change to the UK financial markets, the low redemption penalty at 1% only until 31st January 2012 provides the flexibility to switch to a fixed rate if appropriate.

If you would like to discuss further please contact Chartwell Funding, our Mortgage Advisory business, on 01454 205120.