MORTGAGE UPDATE: The return of the fix 'n' mix
Despite some paralysis in the market in the immediate run-up to the general election, mortgage product launches have been progressing rather nicely.
Woolwich continues to have an excellent suite of products including some enticing fixed rates, which we are beginning to see a lot more interest in as the year progresses. Its fixed range currently includes a 2.98% two-year deal while its tracker range includes a 2.49% deal for the lifetime of the loan.
Abbey and Northern Rock, among others, have been reducing rates. Abbey, for example, is currently offering a 2.54% three-year tracker. ING has also been getting in on the act with some eye-catching offerings.
Woolwich, Halifax, Nationwide and Northern Rock all seem to be getting quicker in turning around applications, while Abbey's service is proving acceptable with borrowers who have a good credit score.
It seems that packaging is everything when it comes to Abbey. The lender requires client information to be packaged correctly from day one, which may prove an unnecessary hurdle for borrowers who deal directly with it.
But the same experience could be had for borrowers dealing with less experienced brokers, who send client information into lenders in dribs and drabs, which is a sure-fire way to delay the application.
We continue to hear tales of woe from HSBC. A client I saw last week was told he would have to wait 10 working days just to have a first appointment with the bank, which is unacceptable.
HSBC's waiting lists may be in part explained by its recent product launches, which have been designed on a fix 'n' mix basis. In other words, borrowers can choose to fix either 25%, 50% or 75% of the loan and then arrange the remainder as a tracker. And the rates are good.
But the approach is hardly innovative, as the lender claims. As any decent broker knows, many lenders have offered deals like this for years, where part of the loan is fixed and part is on a variable tracker rate, with the exact percentage split according to a client's circumstances.
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Andrew Montlake is communications director at Coreco.
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