Natwest offers new record low 2.95% 5 year fixed rate mortgage

Graham_Devon

Sounds grand.

It's kind of being linked to the £80bn funding for lending scheme. It's available for those looking for sub 60% LTV.

Ray Boulger states that this shows the funding for lending scheme is quickly proving effective as far as the mortgage market is concerned.

£2,495 fee by the way.

andyroberts1967

Wow, that fee is outrageous!!
That works out at an extra £40/month just to cover the fee.
I guess if you have a large mortgage then it's a smaller proportion, but it seems a lot to me!

System

3.69 without the fee

the_flying_pig

if you're borrowing really big bucks it's a great deal.

a simple ready reckoner - half a percentage pt off your borrowing rate saves you about £300 a yr [so £1500 over 5 yrs] for every £100k you borrow.

so not such a great deal for someone buying a haliwide 'typical' house, but good for big borrowers.

Graham_Devon

This has now been confirmed to be part of the funding for lending scheme.

What a great way for the banks to stitch up the scheme! Reduce the interest rate, an up the fee to cover the reduced interest rate. LOL. Gotta give it to them!

Apparently there are no confirmed better deals under the funding for lending scheme for 95% mortgages, and only 2 confirmed deals for 90% deals. The rest so far are all aimed at 60% mortgages and a mortgage "expert" suggested you need to check the fee's, penalties and clauses carefully, as exit fee's and clauses have gone up on a couple of these deals instead of front loading them.

RenovationMan

http://www.thisismoney.co.uk/money/mortgageshome/article-1687576/What-mortgage-rates.html

"A mini-price war has broken out for the best borrowers, as HSBC, Santander and NatWest offer record low five-year fixed rates below 3 per cent.

This follows months of bad news for borrowers, who had seen the best new mortgage rates on offer rise substantially since early spring.
At the same time, the Bank of England has delivered an £80bn plan to get more money to homeowners and businesses and lenders have already begun to cut rates."

As Predicted, mortgages are falling back though it's a bit premature for my own requirements. Hopefully these low prices will stabalize and still be available in May when I remortgage. I'm hoping 10 year fixes follow the 5 year ones and start to fall.

wotsthat

Graham_Devon wrote: »

Apparently there are no confirmed better deals under the funding for lending scheme for 95% mortgages, and only 2 confirmed deals for 90% deals. The rest so far are all aimed at 60% mortgages and a mortgage "expert" suggested you need to check the fee's, penalties and clauses carefully, as exit fee's and clauses have gone up on a couple of these deals instead of front loading them.

Does anyone need an expert to tell them to check what they are buying?

Fixed rates were falling before this scheme. Seems to be an acceptance that rates are going nowhere for a while and increased competition for the lowest risk borrowers.

Graham_Devon

wotsthat wrote: »

Does anyone need an expert to tell them to check what they are buying?

I would suggest many do.....yes.

Ever heard of people buying PPI that would never have covered them? (that's just one example by the way, before you start the pedance).

Missold endowments? (another example, there are others of course, so no need for pedance).

Unknown exit fee's? Unknown collars? (2 more examples, and again, there are other examples out there etc).

nicko33

Graham_Devon wrote: »

so no need for pedance

I think you mean "pedantry"

RenovationMan

wotsthat wrote: »

Does anyone need an expert to tell them to check what they are buying?

Clearly Graham does if he can't understand that the fee is a set amount while the gains from the fixed rate are variable:

Graham_Devon wrote: »

What a great way for the banks to stitch up the scheme! Reduce the interest rate, an up the fee to cover the reduced interest rate. LOL. Gotta give it to them!

A real-life example for Graham using my £250,000 IO mortgage:

With fee: £252,495 at 2.95% for 5 years = £37,243 paid in interest.

Fee Free: £250,000 at 3.69% for 5 years = £46,125 paid in interest.

So rather than 'covering the reduce interest rate with the fee', I would be better off by £8882 by paying the fee.

Silly boy. :rotfl:

neilem

Hmm, you save and gather up a large deposit for a better rate, and then they sting you with a fee of £1500-£2500 fee? Which the rate only lasts about 2-5 years. How can they justify this amount? Surely the point of adding a good deposit towards your mortgage is to ensure you aren't a risk, so why the huge fee... truely baffled by some of these charges that come with buying a house.