Mortgages. Carrots and Sticks.
We have detected that mortgage lenders are increasingly turning
- Rate Tarts No Longer Welcomed By Mortgage And Credit Card Providers
- Mortgage lenders are taking steps to reduce the number of people switching their mortgages. This article looks at the situation.
- ReMortgaging is it still worthwhile
- Rate Tart is the name coined by the mortgage industry for borrowers who switch mortgage lenders chasing lower interest rates. Call them Rate Tarts if must, but they'll be the richer for it!
- Mortgages. Exit fees to be capped.
- After years of lenders having a free hand to increase exit charges, the FSA steps in to restore fairness for consumers. This article explains.
- New rules for buy to let landlords
- New regulations concerning larger properties in multiple occupation may make a buy to let mortgage a viable proposition. The end result of this should improve the standard of such properties.
- House price rises – a cautionary tale
- The housing market seems to be buoyant with house sales exceeding expectations in some parts of the country. If mortgage rates start to rise, the market may see a correction. Take care not to take on too much debt.
The technique involves offering a mouth-wateringly cheap initial rate of interest and then encouraging the borrower to stay on beyond the introductory period by imposing punitive penalties if the borrower redeems the mortgage within a set number of years.
Take the Portman Building Society for example. It's offering borrowers an interest rate of just 1.95% fixed for two years – but thereafter, you must stay with the Society for a further four years paying base rate plus 1.99%. This currently works out at 6.49%. If you want to move before the end of the sixth year there are swinging penalties ranging from 7% to 2% depending on when you make the move. This means that a borrower with a £125,000 repayment mortgage over 25 years would start off paying just £530 per month based on the current base rate. Then after the initial two year introductory offer, monthly payments rise to £854. That's a rise of 62%.