MSE News: Co-op launches lowest-ever five-year fixed mortgage

Consumerist

JimmyTheWig wrote: »

[I wish this figure (2.99% / 3.03% / whatever) was quoted on mortgages. I think it's the most important one to be able to compare like with like, but it's the one bit of information that we are not given.]

I think the problem is that the overall APR will depend on the amount borrowed and the initial mortgage term; these will vary from borrower to borrower.

JimmyTheWig

Consumerist wrote: »

I think the problem is that the overall APR will depend on the amount borrowed and the initial mortgage term; these will vary from borrower to borrower.

Both of these could be based on industry-wide assumptions. As they are now, presumably.

Consumerist

JimmyTheWig wrote: »

Both of these could be based on industry-wide assumptions. As they are now, presumably.

I'm not sure how that might work when these deals include an up-front fee to skew the underlying APR.

I like the simplicity of your methodology above which seems logical and accurate enough for comparison purposes over the relatively short periods of these deals. The small error in your results would apply to all deals being compared so making the comparison valid.

Since the arithmetic is simple, I would rather rely on your basis of comparison than anything the banks might dream up.

How about you?

JimmyTheWig

Consumerist wrote: »

Since the arithmetic is simple, I would rather rely on your basis of comparison than anything the banks might dream up.

How about you?

While _I_ would still work it out myself (at least until I was happy with the way the banks were doing it) I don't think many people look at it the way I look at it.
The point is that someone in this thread has looked at the APR of the mortgage and decided that it wasn't worth it. Assuming that they weren't planning on staying on the SVR for 20 years then I think anything the banks do would be better than an APR for a mortgage.

Consumerist

The only way I can think of to accomplish any meaningful result is to produce APR tables for loan amounts and durations. There would then need to be separate tables for each initial term.

I really don't see banks going down that route voluntarily. I reckon we're going to be on our own and relying on such things as spreadsheets or possibly independent web sites for that sort of information.

michaels

Anyone heard any rumours on how long this rate might be available? No one else seems to have followed the lead.

latecomer

No idea but our paperwork was delivered yesterday (following phone application the week before). I'm hoping its a relatively quick decision but we dont need it before the 1st Feb so no huge rush.

They did quick 6-8 weeks for processing though.

kingstreet

Those waiting until the second quarter of 2013 are likely to see some very attractive deals popping up. Lenders taking advantage of the "funding for lending" scheme will have to lend what they committed to, or will face penalty charges.

They will face two options - cut rates and reduce their margin on low LTV stuff, or lend at higher LTVs. I'm not sure there will be a great appetite for the latter.

Lenders who have previously paid more for their money will be able to borrow and lend at significantly lower rates, (LBG, RBS, Santander) bringing them a lot closer to the likes of HSBC, now all those taking advantage of FFL are effectively on a level playing field.

michaels

latecomer wrote: »

No idea but our paperwork was delivered yesterday (following phone application the week before). I'm hoping its a relatively quick decision but we dont need it before the 1st Feb so no huge rush.

They did quick 6-8 weeks for processing though.

I was wondering if I could pay the 150 quid booking fee and then get them to move very slowly so that I had an option t move to the fixed rate but could change my mind if something better came up or even just that I decided to stay on floating...

kingstreet wrote: »

Those waiting until the second quarter of 2013 are likely to see some very attractive deals popping up. Lenders taking advantage of the "funding for lending" scheme will have to lend what they committed to, or will face penalty charges.

They will face two options - cut rates and reduce their margin on low LTV stuff, or lend at higher LTVs. I'm not sure there will be a great appetite for the latter.

Lenders who have previously paid more for their money will be able to borrow and lend at significantly lower rates, (LBG, RBS, Santander) bringing them a lot closer to the likes of HSBC, now all those taking advantage of FFL are effectively on a level playing field.

Sounds good but how does the increase in 5 year libor due to the expected AAA downgrade impact what rates might be available?

kingstreet

Makes no difference. They are all borrowing from HMG and all at the same rate.