"TWO-YEAR FIX FROM FIRST DIRECT, INITIAL RATE 3.49 PER CENT
If you would rather not have to worry about interest rates changing and want to be sure that your monthly repayments are fixed for a set number of years, there are a number of competitive fixed-rate mortgages on the market.
The lowest two-year fixed rate is from First Direct, according to Mr Hollingworth. The rate is 3.49 per cent, but borrowers will need to be careful to factor in the large fee, £1,298, to make sure that it represents the best deal for them. The rule of thumb is that the bigger the loan, the less significant the fee.
This mortgage is also for amounts of up to 60 per cent of the property value. For people wanting to borrow 75 per cent, the lender will charge interest at 3.94 per cent - "this also represents good value", Mr Hollingworth said.
Alternatively, moneyfacts.co.uk , the information service, recommends NatWest's two-year fix for 75 per cent loans at 3.69 per cent with a fee of £799.
FIVE-YEAR FIX FROM NEWCASTLE BUILDING SOCIETY, INITIAL RATE 4.99 PER CENT
Some borrowers are reluctant to fix for just two years, on the basis that many economists expect Bank Rate to remain very low for some or all of that period, making a variable rate such as HSBC's more attractive. After all, why fix at 3.49 per cent for two years if you think you will pay 1.99 per cent for two years with a tracker?
But as few expect rates to remain so low for five years, a longer-term fixed rate could make more sense.
Newcastle's five-year fix charges a rate that ranks alongside the lowest available over that period but is also offered for up to 75 per cent of the property value, where others, such as a 4.95 per cent deal from HSBC, are available only at 60 per cent. Mr Hollingworth said: "This is a great deal for those looking for medium-term security." The fee is £994.
THREE-YEAR TRACKER FROM ABBEY, INITIAL RATE 2.99 PER CENT
Another mortgage that illustrates the fact that borrowers will, initially at least, pay less with trackers than with fixes.
This loan charges 2.49 percentage points above Bank Rate for three years, meaning that you would currently pay 2.99 per cent. At the end of the introductory offer the rate reverts to Abbey's SVR, currently 4.24 per cent.
Borrowers need a deposit of at least 30 per cent and there is a fee of £995, although Abbey will pay for the valuation and legal work.
OFFSET LIFETIME TRACKER FROM WOOLWICH, INITIAL RATE 2.97 PER CENT
Some borrowers would prefer a loan that they can stick with for the whole term, avoiding the need to remortgage every few years.
This mortgage tracks Bank Rate for the entire term, charging 2.47 percentage points above the Bank of England rate. Borrowers need a 30 per cent deposit and will pay a fee of £1,499; there is also an early repayment charge for the first three years.
As this is an offset loan, borrowers can use their savings to help reduce the interest bill"
[ view entry ] ( 4 views ) | permalink |
( 3 / 271 )You will no doubt have heard a great deal about PPI's in the last few months due to this product being mis-sold. However recent news is that Barclays are hoping to challenge the ban on the sale of these.
"Barclays will begin its bid today to have a future ban on the sale of controversial payment protection insurance alongside credit agreements lifted.
The group is challenging a recent decision by the Competition Commission to ban the sale of the insurance alongside credit cards, loans and mortgages from October 2010, with providers instead having to wait for seven days before they can contact customers to sell them the cover.
The move is one of a number of measures which will be introduced next year in a bid to increase competition in the market, alongside changes to make it easier for people to shop around for the cover and to change providers.
Payment protection insurance (PPI) covers loan repayments if the holder is unable to work due to an accident or illness or if they lose their job.
Barclays is arguing against the point of sale ban on the grounds that it is not justified by the evidence collected as part of the Competition Commission’s investigation.
A Barclays spokeswoman said: “The Barclays appeal does not challenge the whole report but is targeted specifically against two points.
“The main area of concern is the point of sale ban which, it is felt, is not justified by the evidence that has been provided.
“Additionally, the scope of the market definition set by the Competition Commission is being challenged.
“The decision to appeal these points has not been taken lightly. However Barclays will continue working on the implementation of all of the remedies contained in the Competition Commission’s report as they are applicable.”
The group is being supported by Lloyds Banking Group, in which the Government holds a 43pc stake, and Shop Direct Group Financial Services.
It is being opposed by the Competition Commission and City watchdog the Financial Services Authority.
The case is being heard by the Competition Appeal Tribunal and is expected to last for four days, although a judgment is not expected for another two months.
Consumer group Which? called for the point of sale ban on PPI to be upheld.
The group’s chief executive Peter Vicary-Smith said: “PPI has been widely discredited, so it’s important that it’s sold separately from other financial products to help consumers make informed choices about how best to protect their finances.
“Rather than appealing the Competition Commission’s decision, Barclays should concentrate its efforts on developing protection products that offer better cover and value for money to its customers.”
The changes being implemented by the Competition Commission are expected to lead to a steep fall in the £4 billion a year that banks and insurers receive from PPI sales.
The product has been the subject of controversy in recent years after consumer groups complained it was being mis-sold to people who would never be able to claim on it, while the practice of bundling it up into loans meant that some people did not even realise they were buying it"
[ view entry ] ( 3 views ) | permalink |
( 3 / 263 )The continuing recession has meant that more people then ever have been requesting support to get help with their debts.
"Record numbers of cash-strapped consumers are contacting Citizens Advice for help with recession-related problems such as debt and redundancy, new figures reveal today.
The charity is now handling around 9,300 new debt cases and talking to 8,000 people with benefit problems every working day as the economic downturn continues to take its toll.
Debt problems shot up by 27% and queries about welfare benefits soared by 22% in the three months to the end of June, compared with the same period the previous year.
The charity's offices in England and Wales received a total of just under 1.7 million enquiries during the second quarter, 17% more than a year earlier.
Within the total, Citizens Advice said enquiries about job seekers' allowance had doubled, while redundancy-related problems were up by three-quarters due to rising unemployment. It has also seen a 44% rise in the number of people with mortgage arrears and a 53% jump in the number of people struggling to pay their fuel bills.
The figures were released today to mark the 70th anniversary of the foundation of the group. Citizens Advice said it spent its first decade helping people with war-related problems, such as tracing missing relatives and getting fair shares of rationing.
Since the turn of the millennium demand for specialist money advice had mushroomed, it claimed, as the credit boom led to rising numbers of people having increasingly complex debt problems.
The group's 27,000 staff - mainly volunteers - now handle around six million problems a year, and half of the population has used the service at some point in their lives.
David Harker, chief executive of Citizens Advice, said: "From rationing to recession, the CAB has been there for people in times of crisis throughout the past 70 years. Dipping into the decades of our history shows that some of the problems people have may have changed but the need for our service certainly has not. As we celebrate our 70th birthday our new figures show that what started out as an emergency service in wartime is needed now more than ever as the recession continues to take its toll on people's lives."
If you need help with your debts then why not have a look at an IVA. This is a legal and government approved method of resolving debt that avoids the consequences of bankruptcy. If you owe over £15,000 to three or more creditors and can't afford to meet the repayments then you may be eligible for an IVA. There are also a number of guides covering all kinds of debt advice on the site.
[ view entry ] ( 6 views ) | permalink |
( 3 / 257 )If you are looking at obtaining a personal loan do you know where to find the best deal? and more importantly do you have a good record? Banks are becoming more selective then ever regarding who they will lend to so it is vital that you have a good track record when it comes to your borrowing habits.
"The era of cheap credit is over. Banks are no longer falling over themselves to offer low-interest rate loans for new cars, kitchens and holidays. But if you really do need a loan (and are confident you can afford the repayments) where can you find the best low-cost deals?
The bad news is, that although the Bank of England has kept interest rates at rock-bottom levels, on personal loans they have gone up. In the last 12 months, on a £5,000 loan, the average rate has jumped from 10.57% to 12.55%, according to research from comparison website Moneynet.co.uk.
And it's not easy to work out whether you can afford a loan, because more than 80% are advertised with "typical" rates. This means you will not be offered the headline rate unless you have a squeaky-clean credit record. Instead, you will be quoted one which reflects the lender's perception of how risky you are – though rules state the advertised rate must be available to two-thirds of applicants.
Many other loans are personally priced – again based on your credit score – leaving few quoting the actual rate you could be offered if accepted. So, who's offering the best rates?
Sainsbury's Bank has a typical rate of 7.9% APR for loans of between £7,500 and £15,000, provided you hold a Nectar card.
This is just beaten by Nationwide's offer, for current account customers only, of a typical 7.7% for loans of between £5,000 and £14,999.
Marks and Spencer Money has a deal giving cashback of 10% of the loan interest if it runs its full course. With the cashback, this equates, typically, to 7.9%.
One outfit, personal loan.co.uk – a division of Co-op Bank – offers a typical rate of 8% on loans from £5,000 to £25,000, while a number of big names – including Abbey, First Direct, Alliance & Leicester and Smile – are quoting typical rates of 8.9%, though in some cases these rates are for existing customers only.
Andrew Hagger of Moneynet says: "Rates are, on average, almost two percentage points higher than this time last year, but that's not the end of the bad news. Lenders will operate a far tougher risk policy in the current economic climate, meaning you'll need a perfect credit history to secure a best-buy rate." It's not hard to fall foul of internal credit scoring. You won't even get off first base if you aren't on the electoral register or if you have county court judgments for not paying a debt. Lenders will also check you are up to date on the rest of your credit.
It's not enough to be simply paying the minimum on your credit cards. Companies will also look at whether you are running close to your credit limit, and how many credit cards and other loans you have. Too much available credit, even if you pay off your bills in full each month, and you could be turned down, offered a higher interest rate than the one advertised, or a smaller loan than you wanted"
[ view entry ] ( 7 views ) | permalink |
( 3 / 258 )Despite the recession it would seem that British consumer debt is actually falling as more people are seeking to repay their debts. According to reports it would seem that the bulk of the repayments have been coming from those in real financial trouble trying to avoid bankruptcy.
"The Bank of England data indicated that consumers paid back £635 million more than they borrowed during July – the first time this has happened since 1993, when the statistics began being collected in their current form.
The fall in the total level of consumer debt, dipping to £1.46 trillion, means thousands of prudent households have started to trim their credit card bills, pay back their mortgages and reduce their unsecured loans.
Debt experts welcomed the development saying it was about time consumers stepped "off the debt spiral" and got their finances in order.
However, economists warned that it was bad for the Treasury and businesses if consumers stopped spending and borrowing.
Louise Brittain, debt partner at accountants Baker Tilly, said: "Thank goodness. This is really good news that the British public is finally doing the sensible thing and not endlessly borrowing and is now stepping off the debt spiral. People have done nothing but spend now and pay later for the last decade or so, and they have realised this just can't go on for ever."
The biggest fall came from mortgages, with home owners paying back £418 million more during July than they borrowed.
Part of the move into negative territory – again the first time this has ever happened – has been driven by banks and building societies cracking down on their lending and only offering mortgages to people with good credit histories"
[ view entry ] ( 6 views ) | permalink |
( 3 / 265 )
Archives
