Mortgages  

Accord targets intermediaries’ FTB clients by slashing rates

New mortgage products from intermediary-only lender Accord Mortgages have reduced rates for borrowers, with only a 5 per cent deposit for first-time buyers.

Accord’s two-year fixed-rate mortgages are now available at a 4.49 per cent with a £845 product fee.

There is also a product fee-free option at 95 per cent LTV at 4.79 per cent, with a £750 cashback on completion and free standard valuation.

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In addition, the lender, which is the intermediary arm of the Yorkshire Building Society, announced cuts on selected two-, three- and five-year products across the residential new business range.

This includes a reduction to two-year fixed-rate loans at 95 per cent LTV, two by up to 0.40 of a percentage point.

Three- and five-year fixed-rate loans at 85 per cent LTV have also been lowered by up to 0.25 of a percentage point.

In February, the lender announced reductions to its two-, three- and five-year fixed-rate loans for borrowers with different LTV levels.

At 65 per cent and 75 per cent LTV, two-year fixes were lowered to 1.79 per cent and 1.74 per cent respectively, both with a £345 product fee.

Another notable reduction included a three-year fixed-rate mortgage at 2.14 per cent with a £845 product fee.

Provider view

David Robinson, national intermediary sales manager at Accord Mortgages, said: “We are always looking to help people achieve their dream of getting on the property ladder and owning their first home. Reducing mortgage rates to offer competitive rates and value for money will clearly help to do this, but we also offer an incentive product for borrowers with a 5 per cent deposit. This reduces the upfront cost of taking out a mortgage, and the cashback on completion means there is help with unexpected legal fees.”

Adviser view

Daren O’Brien, IFA at London-based Aurora Financial Solutions, said: “It is a good thing that the lender is trying to encourage first-time buyers into the marketplace. We do not want to see a return of loans at 100 per cent because that is one of the things that got us into trouble five or six years ago. Loans at 95 per cent LTV seem reasonable, but with house prices as high as they are at the moment, particularly in the south, we do not want to push that housing bubble any higher.

“Short-term loans give buyers that flexibility, because at the moment you do not know what will happen to interest rates.”

Charges

£845 product fee for two-year loan at 95 per cent LTV.

Verdict

Many lenders have focused their attention on those who have been unable to get onto the property ladder due to having insufficient cash available for deposits and/or because of soaring house prices – particularly in London and the South East. Higher LTV loans will certainly help more people get onto the ladder, but borrowers will be able to find a better deal if they can afford the time to save for a lower LTV mortgage.