HALIFAX 95% - the big guns have landed

payless

Obviously demand driven but if the gov is guaranteeing 15% , then the risk to the lender is reduced. ( hence my thoughts on the premium rate) 

Thrugelmir

payless said:

As a premium.. yes.  , 0.63% is higher than the total rate on my mortgage . 

The Government guarantee isn't free. Comes at a price that the borrower bears the cost of. The levy will be used to build a fund to offset the defaults. Be no cost to the taxpayer. 

payless

Even so, 0.63% x5 yr premium  for 95% instead of  90% ..regardless on who gets it ( gov or lender) 

Even with a reducing balance, that’s still collecting half the extra borrowing as extra interest over a 5 yr fixed period . 

Simplified , interest only  First year 90k bowering  on £100k  at 3.37% = 3033 

    95k on £100k at 4% =  3800

so  an extra £767  for the extra £5k that’s equal to over 15% on the extra.  

getmore4less

payless said:

Even so, 0.63% x5 yr premium  for 95% instead of  90% ..regardless on who gets it ( gov or lender) 

Even with a reducing balance, that’s still collecting half the extra borrowing as extra interest over a 5 yr fixed period . 

Simplified , interest only  First year 90k bowering  on £100k  at 3.37% = 3033 

    95k on £100k at 4% =  3800

so  an extra £767  for the extra £5k that’s equal to over 15% on the extra.  

You can do that analysis starting at 60% through each additional level.

What were high lending fees back in the old days when they existed?
(I can't remember)

silvermountains

K_S said:

lonibra said:

stevenbecca said:

stunned to see the interest rates so high, I'm going to be paying less than with adverse credit with an adverse lender.

I'm stunned that you're stunned

Halifax 90% LTV no-fee is 3.37%. 95% LTV is 4%. Is a 0.63% jump really that much?

@lonibra The last time around (old H2B mortgage guarantee scheme), the difference was about 1% I believe (though at higher interest rates overall).

I would expect 95% rates to quickly soften. Natwest 95% fee-free 2yr fix rate will be 3.9% so the squeeze has already started.

Do you think that the influx of 95% mortgages will have any effect on the rates for current 90% offers?

payless

Higher lending charge (hlc). or mortgage indemnity ( mig)  versus tiered rates ... throwback 

https://www.theguardian.com/money/2004/may/08/mortgages.property

Two ways of achieving the same... risk premium,  was just highlighting the risk  premium (RP). paid by the borrower seems a little high in the original example.( can’t do the full sums right now on a reducing balance , but over 5 yrs) .  well over £3000...   strangely despite the much lower base rates, the RP is  about double of what the HLC would have been on the same mortgage in 2004

getmore4less

payless said:

Higher lending charge (hlc). or mortgage indemnity ( mig)  versus tiered rates ... throwback 

https://www.theguardian.com/money/2004/may/08/mortgages.property

Two ways of achieving the same... risk premium,  was just highlighting the risk  premium (RP). paid by the borrower seems a little high in the original example.( can’t do the full sums right now on a reducing balance , but over 5 yrs) .  well over £3000...   strangely despite the much lower base rates, the RP is  about double of what the HLC would have been on the same mortgage in 2004

you don't have to go back that far.

Natwest as an example

new business purchase 

my data goes back to 

31 July 2019  95% no fee 
2y 3.08%
5y 3.58%

each data point I took
the rate stayed the same till at least 20 march 2020
gone in the 29 April 2020 sample.

there is still significant premium over a year ago.

other  rates at the 20 March 2020 point
Natwest like you to be paying the fee to get the rate.


2 Yr Fixed Purchase 80% 1.41% £995
2 Yr Fixed Purchase 80% 2.94% £0 
5 Yr Fixed Purchase 80% 1.79% £995 
5 Yr Fixed Purchase 80% 3.38% £0 

2 Yr Fixed Purchase 85% 1.63% £995 
2 Yr Fixed Purchase 85% 3.03% £0 
5 Yr Fixed Purchase 85% 1.93% £995 
5 Yr Fixed Purchase 85% 3.50% £0 

2 Yr Fixed Purchase 90% 1.84% £995 
2 Yr Fixed Purchase 90% 3.07% £0 
5 Yr Fixed Purchase 90% 2.23% £995 
5 Yr Fixed Purchase 90% 3.57% £0 

2 Yr Fixed Purchase 95% 3.08% £0 
5 Yr Fixed Purchase 95% 3.58% £0 

danlightbulb

Just another stimulus to push up prices even further. Rates underwritten by the Government shouldn't be any more than those for 80% LTV mortgages.

85% and 90% deposit mortgages still no cheaper.

In summary, for me personally, rates higher, deposits higher, house prices higher, and availability lower, than they were just over a year ago, meaning Im further away from buying than ever.

willow_alex

I’ve seen NatWest mention no further borrowing for 7 years. Is this a NatWest rule or a government rule? And if government, does it follow you for 7 years or ends when you remortgage for a non government backed mortgage, say at the end of your initial term? 

We are deciding between 90 & 95 but want to be able to remortgage in a few years (I.e less than 7!)  to be able to do renovation / home improvements. 

K_S

@willow_alex Where have you seen this? I would be surprised if there was anything in the rules that stopped you from doing a capital-raise remo at the end of the fixed term, if at all the numbers stacked up.