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MPC vote to hold bank base rate at 0.50%

April 20th 2010

Policymakers have indicated that the quantitative easing programme has been halted for the time being, but the door has been left open for further action if required.  Although officially out of recession, the economy still looks fragile and most analysts expect base rate to remain on hold until at least quarter three this year.

 
In these unprecedented times it is difficult to be definitive when recommending which products offer the best value.  Arrangements linked to base rate offer excellent short term value but you must remember that rates are likely to increase once the economy emerges from recession. Redemption penalties and tie-ins should be avoided if at all possible. With fixed rates at or close to the bottom of a cycle there is now an excellent opportunity to lock in to highly competitive products either short or long term.
  
 
Product
Initial Rate
Description
SVR
ERC
LTV
 
Product Fee
OCC
2 Year Flexible Tracker
 
2.49%
2 year tracker
4.24%
2% for 2 years
70%
£995
4.00%
Offset Tracker
 
2.59%
Offset 2 year tracker
4.59%
3% 1st year
2% 2nd year
60%
£999
4.70%
 
 
3 Year Fixed
 
4.29%
Fixed to 30/04/2013
4.99%
3% to 30/04/2013
70%
£1,495
5.00%
 
 
5 Year Fixed
 
4.64%
Fixed to 31/04/2015
3.94%
1% to 30/04/2015
60%
£999
4.40%
    
 
BEWARE OF SVR
Many lenders are using the ‘exceptional circumstances’ clause to increase their standard variable rates.  The market also expects S.V.R.’s to increase faster than base rate when rates start to rise. Our strategic mortgage partner recommends that any one currently paying SVR reviews their arrangements immediately.
 
OFFSET FOR TAX
With poor returns on offer for deposits clients are seeking competitive alternatives.  Many find an offset mortgage attractive as the arrangement effectively offers the opportunity for a higher rate taxpayer to receive gross interest.  Therefore managing savings monies more effectively and saving tax.
 
MOVING HOUSE
If you are considering purchasing a property either in the UK or overseas our strategic mortgage partner will match your current circumstances and future aspirations with the most relevant of today’s mortgage products.  They will obtain a lender’s ‘Agreement in Principle’, which is aimed to put you in a strong position before submitting an offer.
 
REMORTGAGE
If you are coming towards the end of a mortgage product, our strategic mortgage partner will benchmark the best offer from your existing lender against the most competitive alternatives, highlighting all the relevant costs and benefits.  An initial report will be produced free and without obligation.
 
If you have a mortgage enquiry please contact us on 0113 287 8200 or e-mail advice@prosperis.co.uk
 
Your home may be repossessed if you do not keep up with payments on your mortgage.