The only two-year fixed mortgage for new customers that remains is the 60 per cent LTV deal for first-time buyers at 1.24 per cent. 

Just five-year fixed mortgages are available for new borrowers with requirements above 60 per cent LTV while existing customers can still opt for a shorter term product.

Rate changes 

Rates on five-year fixed mortgages with three year early repayment charges (ERC) have been cut by 0.10 per cent.

These deals are available to purchasers and first-time buyers and rates range from 2.24 per cent at 60 per cent LTV to 4.04 per cent at 85-90 per cent LTV. 

Across five-year fixes with five-year ERCs, rates have gone up by 0.15 per cent, the same increases are seen on the first-time buyer stepped down product at 85-90 per cent LTV.  

The rate of the stepped down mortgage falls by 10 basis points each year. 

These changes are effective from 15 January. 

A TSB spokesperson said: “As part of our regular review of our products, we have made temporary changes to ensure our mortgages are in line with market conditions and so we’re able manage our service levels to support the demand from our customers.”

The saving is worth £169 per month, yet almost nine in 10 borrowers haven’t considered moving lenders, a study by TSB found.

A quarter of homeowners say they would find the task of securing a new rate too stressful or daunting – providing an opportunity for brokers to step in and guide overwhelmed consumers through the process.

A further 14 per cent said remortgaging takes too long and they wouldn’t know where to look for a new deal.

For the majority of homeowners, their mortgage is their biggest monthly outgoing, yet almost a third were not aware of how much they paid in interest each month.

Nick Smith, head of mortgages at TSB, said: “Remortgaging might not be right for everyone, but it’s important to take a look at your options, know the amount of interest you’re paying and speaking to your bank or mortgage adviser about any changes that could save you money.”

The bank has removed almost all its fixed rate fee-free deals up to 85 per cent LTV for first-time buyers, movers and remortgagors.

It’s five-year fixed rates that have three-year early repayment charges remain fee-free.

For landlords, the bank has withdrawn all two-year fixed rate deals leaving just five-year fixed rate deals in the range.

TSB introduced the fee-free options up to 85 per cent LTV last week.

A TSB spokesperson said: “As part of our regular review of our products, we have made temporary changes to ensure our mortgages are in line with market conditions and so we can manage our service levels to support the demand from our customers.”

Halifax 

Halifax has added two mortgages for first-time buyers up to 85-90 per cent LTV after announcing its return to this lending tier last week. 

The deals include a two-year fixed with a rate of 3.54 cent and a five-year fixed at 3.59 per cent. Both have a product fee of £999 and are available for borrowing levels of £25,000 to £500,000. 

The mortgages are not eligible to be used on new-build properties or as part of any scheme such as Help to Buy or shared ownership. 

The early repayment charge (ERC) rate on the two-year fixed starts at two per cent, before declining to one per cent in the second year, while the five-year fixed drops from five per cent in the first year to one per cent in the final year. 

TSB 

TSB has reduced rates on some of its mortgages by as much as 70 basis points. 

Two-year fixes for first-time buyers and purchasers at 60-80 per cent LTV have been cut by up to 0.45 per cent, and rates now vary from 1.24 per cent to 2.04 per cent. 

Five-year fixes at 60-80 per cent LTV with five year ERCs have been reduced by up to 0.7 per cent. 

For first-time buyers, the rates on these mortgages start at 1.74 per cent for 60-75 per cent LTV to 2.34 per cent at 75-80 per cent LTV. 

Elsewhere, first-time buyer stepped down mortgages at 85-90 per cent LTV have been cut by 25 basis points while five-year fixed remortgages at 60-85 per cent LTV have had rates reduced by up to 0.35 per cent.  

Expanded ranges, rate cuts, new entrants and criteria changes are what made advisers sit up and take notice the most this week.

In top spot, was Santander’s decision to add more high LTV deals to its range and its Brexit-focussed lending criteria changes was the third most read story of the week.

Despite Halifax’s announcement late in the week that it too would re-join the 90 per cent LTV market, for first-time buyers only, it was still the fourth most popular story such is the buzz around the next big lender to come back and support low deposit lending.

Here’s this week’s top ten stories on Mortgage Solutions:

Santander adds high LTV mortgages and fee-free range

TSB adds more 90 per cent LTV mortgages as Halifax and BM Solutions tweak rates

Santander makes mortgage lending criteria changes ahead of Brexit

Halifax re-entering 90 per cent LTV mortgages

Two-year fixed rates at 90 per cent LTV now highest for almost six years

NatWest requires payslips for furloughed borrowers returning to work

Reliance Bank reintroduces key worker mortgages up to 90 per cent LTV

Precise head of sales Jamie Pritchard exits firm

Compare the Market launches online execution-only remortgages

‘Every application is a battle’ but the crisis is driving change – Marketwatch

The product has a rate of 3.79 per cent, offers £500 cashback and will be available from tomorrow. 

This is the first mortgage up to 90 per cent LTV the bank has offered to new borrowers since September when it launched a one-day tranche to first-time buyers.

Nick Smith, head of mortgages at TSB said: “We know that raising a deposit is often the biggest challenge our customers face when buying their first property.  

“With the continued challenging environment, we have introduced a mortgage that will provide more help for our customers to buy their first home.” 

Virgin Money makes rate cuts 

Virgin Money has made a series of rate reductions across its mortgages up to 90 per cent loan to value (LTV), with cuts ranging between two and 25 basis points (bps). 

For shared ownership borrowers with a 10 per cent mortgage, the two-year fixed with a £995 fee has gone down by 25 bps to 3.39 per cent. 

A five-year fixed residential mortgage at 65 per cent LTV with a £995 fee has been reduced by 0.16 per cent to 1.45 per cent, while the three-year fixed equivalent now has a rate of 3.09 per cent, a reduction of 15 bps. 

Additionally, two Help to Buy mortgages at both 55 per cent and 75 per cent LTV have been reduced by 0.02 per cent to 2.17 per cent. Both products have a fee of £995 and are fixed for five years. 

Buy-to-let mortgages have also seen cuts of up to 0.23 per cent. Rates for core and portfolio borrowers now vary between 1.87 per cent at 60 per cent LTV and 2.08 per cent at 75 per cent LTV. 

The changes are effective from 27 November. 

It comes after NatWest earlier this week placed fresh limits on borrowers working for themselves.

Nationwide last month put in place lower LTVs for the self-employed.

TSB reduces LTVs and LTIs

TSB has reduced the maximum loan to income (LTI) and loan to values (LTV) for self-employed borrowers.

Applicants working for themselves will only qualify for a maximum LTV of 75 per, while the LTI has also been cut to 4.25

By comparison, employed applicants can qualify for 85 per cent LTV and an LTI of 4.49, where the total income is more than £40,000.

A TSB spokesperson said: “These are temporary changes to ensure our mortgages are in line with market conditions and so we’re able manage our service levels to support the demand from our customers.”

Santander asks for more information on self-employed

Santander has tightened self-employed income evidence demands and now requires explanations of how businesses have survived Covid-19 lockdowns and made changes to business models.

The move affects all new residential self-employed mortgage applications and the lender told brokers it may also be in touch on cases which have already been submitted but not yet agreed.

In addition to existing evidence requirements, Santander is now asking for three months’ business bank statements where the borrower’s income or business has been affected by Covid-19.

The most recent bank statement must not be more than 30 days before the date of the application.

Where the client’s income or business has been unaffected by Covid-19, advisers must explain why they have not been affected or how the client has changed the way they operate.

They must also provide confirmation the business can continue to trade under any current or future lockdown restrictions in a way that allows the income declared on the application form to be sustainable.

Affected businesses

Where income or business has been affected by coronavirus alongside the three months’ business bank statements other questions must also be answered.

They are:

• Was the business unable to trade during Covid restrictions and if so for how long?
• What impact the previous Covid restrictions have had on the business turnover and customer income?
• Was any government assistance applied for? If so, details are needed.
• What impact any current or future lockdown restrictions will have on the business and how this will affect the turnover and income.
• Explain how the business bank statements support the income declared for affordability on the application form.

Santander head of sales Helen Harrison said: “Santander remains committed, as a responsible lender, to supporting self-employed customers applying for a mortgage up to 85 per cent LTV.

“The recent changes to our evidence requirements will help us to continue to work with customers to fully understand any recent impacts on their business and ensure that any borrowing remains affordable.”

At 75-80 per cent, rates now start from 1.64 per cent with a £999 fee and 1.99 per cent with no fee. 

At the upper end of the scale, product transfers within the 90-125 per cent LTV tier have a rate of 3.49 per cent. 

Other rates range from 2.24 per cent to 2.94 per cent for switching residential borrowers with 10 to 20 per cent equity in their homes. 

The bank has also increased rates on its five-year fixed product transfer mortgages by 0.05 per cent. 

These products have early repayment charges for the first five years of the term, and rates now vary between 2.44 per cent and 2.99 per cent. 

The TSB reinstatement of two-year fixes comes at all LTV levels up to 85 per cent after removing them in October as part of a mass withdrawal of products.

The lender has only returned with fee paying products which are available on first-time buyer, house purchase and remortgage ranges.

For first-time buyers and movers the deals have a £995 fee and range from 1.39 per cent at 60 per cent LTV up to 2.99 at up to 85 per cent LTV.

For remortgaging there are £995 and £1,495 fee options with rates ranging from 1.19 per cent to 2.64 per cent.

Buy-to-let is still limited to five-year fixes for new business.

Virgin Money

Virgin Money has cut selected rates across its residential and buy-to-let offerings – with high LTV deals seeing some of the biggest reductions.

For new business, selected 85 per cent LTV fixed rates have been reduced by up to 0.33 per cent.

At 65 per cent LTV a pair of five-year fixes with zero fee and £995 fee have been reduced by 0.49 per cent and 0.33 per cent respectively, while a five-year fix with £1,495 fee has been introduced at 1.42 per cent.

In buy-to-let, selected 60 per cent and 75 per cent LTV fixes have been reduced by up to 0.25 per cent.

The lender has also increased rates on product transfers with 85 per cent LTV deals rising by up to 0.41 per cent among the increases.

The lender has increased rates on products by up to 80 basis points.

For the recently introduced first-time buyer and homemover ranges, the five-year fixed with three-years early repayment charges (ERC) at up to 80 per cent LTV has increased by 70 basis points to 3.44 per cent.

All the five-year fixed deals with five-year ERCs have been increased by up to 0.80 per cent – the highest 85 per cent LTV version is now at 3.24 per cent.

And the ten-year fixed with five-years ERCs at up to 85 per cent LTV has risen by 0.40 per cent to 3.64 per cent.

Remortgage rises

The remortgage range has seen similar levels of rate increases.

Rates on the five-year fixes with three-year ERCs from 60 per cent to 85 per cent LTV rates have been increased by up to 65 basis points.

All the five-year fixes with five-years ERCs have risen by up to 60 basis points.

And the ten-year fix at up to 85 per cent LTV has increased by 70 basis points to 3.54 per cent.

A TSB spokeswoman said: “These changes are part of our regular review of our products to ensure we’re able to manage our service levels and support the demand from our customers.”