First Direct swamped by lifetime tracker mortgage applications

Really2

Grahams favorite paper but he missed this one.
http://www.guardian.co.uk/money/2010/aug/11/first-direct-lifetime-tracker-mortgage

First Direct mortgage customers are having to wait four weeks for interviews to apply for the bank's lifetime tracker mortgage following a deluge of applications.

The bank has seen a 40% increase in calls about mortgages following a reduction of its application fee to £99 at the beginning of July.

The lifetime tracker repayment loan, which has proved particularly popular, is set at 1.79% above base rate until the entire loan is paid off for those needing to borrow 65% loan to value (LTV), 2.29% above base rate for those on a 75% LTV, or 3.49% above base for those on a 85% LTV.

Andrew Hagger of financial product comparison website moneynet said: "When it comes to tracker mortgages First Direct are pretty much number one. The application fee swings it and the fact that there are no exit penalties also helps."

The bank is likely to change the rates on its mortgage range in September, but although Rebecca Hirst, a spokeswoman for First Direct, confirmed that customers were having to wait up to a month to get an interview with the bank's mortgage staff, she said: "We don't want people to panic about this. We're sending letters to everyone that has rung up about the mortgages confirming that, providing they qualify, they will get the interest rate they initially called about."

She added that First Direct was recruiting more staff to deal with the rush in new business and had drafted in help from its sister bank, HSBC, "so the callback queue is not growing any more".

The bank could face a further surge in new business following the Bank of England's quarterly inflation report this morning, which suggested it was in no hurry to raise interest rates from their record low of 0.5%. Governor Mervyn King said that while the VAT rise planned for the beginning of next year would keep inflation above 2% in 2011, the rate was likely to drop below the 2% target in 2012. This will help reduce pressure for a rise in the base rate.

I have posted all of the text just in case I stopped it at a point someone did not approve of.

Be interesting to know how much of this transpires to knew purchases on the back of the figures yesterday.

Really2

Sorry missed a bit dont want to get told off.

However, Hagger said borrowers who are already on a tight budget should consider opting for a fixed-rate mortgage, which although not as cheap as a tracker deal can be highly competitive right now. "The best idea is to check out how much your mortgage will cost you if it goes up by 1% or 2% and consider if you can afford the rise," he said. "If not, fix,"

At a 70% LTV HSBC is offering the cheapest two- and five-year fixed-rate loans set at, respectively, 2.99% with a £399 fee over two years and 3.95% with a £599 fee over five years.

Yorkshire building society is selling the cheapest two- and five-year fixes for those on a 75% LTV with a rate set at 2.99% with a £495 application fee for two years and 3.99% with a £995 fee for five years.

For those needing an 85% LTV Market Harborough building society is the cheapest over two years at 3.95% with a £995 fee, while Norwich & Peterborough building society is cheapest over five years at 4.99% and a £995 fee.

Blacklight

Perhaps it's just a miserable few that post on here and other similar forums that don't know a good thing when it's staring them in the face and this isn't representative of what's happening in the real world.

There does seem to be a hell of a lot of others that are falling over themselves to get in while it's cheap to buy.

DervProf

2.29% above base rate with a 75% deposit. That might seem quite good at the moment.

If interest rates start to rise, and you decide you want an alternative deal (say a fixed rate deal), how much does it cost to switch to another deal/provider ?

DervProf

Blacklight wrote: »

Perhaps it's just a miserable few that post on here and other similar forums that don't know a good thing when it's staring them in the face and this isn't representative of what's happening in the real world.

There does seem to be a hell of a lot of others that are falling over themselves to get in while it's cheap to buy.

Yes, cheap to buy, so no worries if interest rates rise, because you won`t have borrowed much. Of course, interest rates are quite high at the moment, so they are unlikely to rise.

chucky

Really2 wrote: »

Grahams favorite paper but he missed this one.

i'm still not sure and he probably isn't sure either why he posted the HSBC one...

he did say he was going to lunch

Graham_Devon wrote: »

No, I need lunch, and to get out of this office.

so i guess he's probably here

doire_2

My wife has been waiting 6 weeks to have her ISA transfered.
Does that mean the bank is "swamped". I'd say like all banks they are slow as f**k at everything

chucky

DervProf wrote: »

2.29% above base rate with a 75% deposit. That might seem quite good at the moment.

If interest rates start to rise, and you decide you want an alternative deal (say a fixed rate deal), how much does it cost to switch to another deal/provider ?

what happens if they don't rise?

Really2

DervProf wrote: »

2.29% above base rate with a 75% deposit. That might seem quite good at the moment.

If interest rates start to rise, and you decide you want an alternative deal (say a fixed rate deal), how much does it cost to switch to another deal/provider ?

Depends on the new lender fee, but FD & HSBC are 0% redemption.

Graham_Devon

Really2 wrote: »

Grahams favorite paper but he missed this one.

To save hassle, considering my name is up in lights from the very start of the thread, I'll do it myself.

I posted a different article. I am a hypocrite.

Blacklight

DervProf wrote: »

Yes, cheap to buy, so no worries if interest rates rise, because you won`t have borrowed much. Of course, interest rates are quite high at the moment, so they are unlikely to rise.

From the article:

"The best idea is to check out how much your mortgage will cost you if it goes up by 1% or 2% and consider if you can afford the rise," he said. "If not, fix,"

You won't get a better fixed rate deal than right now. If interest rates go up then it's likely you'll be better placed to afford the repayments when the term ends, you've paid off some of the capital and your wages have increased.