Mortgages  

TSB Intermediary unveils ‘stepped product’ alongside 95% LTV fixes

TSB Intermediary has launched a series of mortgage products of up to 95 per cent LTV.

Two- and five-year fixes between 90 and 95 per cent LTV are priced at 4.49 and 4.89 per cent respectively without a product fee.

The lender is offering a new three-year ‘stepped product’ fixed at 3.59 per cent for the first year, rising to 4.69 per cent for the second and third years, with a £995 product fee.

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TSB has also launched a 10-year ‘fix and flex’ mortgage allowing home-owners to leave the deal after five years without having to pay an early repayment charge. The product comes without a product fee.

The maximum size of the mortgages is capped at £250,000.

Earlier in July, the provider cut the rate across its range of fixes by 0.10 of a percentage point for existing customers looking to transfer to a new deal with the lender when their previous one ends.

Provider view

Roland McCormack, intermediary director at TSB, said: “The mix of TSB’s mortgages allied to our reliable expert-to-expert service is proving to be a hit with brokers. The introduction of 95 per cent mortgages through TSB Intermediary is the latest milestone in the launch of our intermediary offering.”

Adviser view

Commenting on the five-year fix, Georgina Partridge, founding partner and head of marketing at London-based Plutus Wealth Management, said: “The rate is considerably high compared with what you can get at lower LTV levels, but that is the price you pay for loans at 95 per cent LTV. It might help first-time buyers to get onto the ladder and remortgage after the five years at a better rate.

“Saving for a bigger deposit for a better rate would be the best thing to do in theory but sometimes this is unachievable. People can ask their family and friends to lend them the money, but again that is not always an option.

“High LTV lending has not quite reached pre-financial crisis levels, but it could be heading in that direction, which would be a good thing because it would indicate an improvement in lenders’ confidence. I do not know if it will help to stem the soaring price of properties.”

Charge

Charges range from £0 to £995.

Verdict

Here, the rates for the two- and five-year fix are competitive although not market-leading. The absence of a product fee is a welcome bonus. The three-year ‘stepped’ product is of particular interest. The first year of a mortgage can be a difficult period for many borrowers as they adjust to their new setting and financial burden. This proposition could appeal to these individuals during their maiden year at their new home, although they face paying a higher rate for the remainder of the contract.

Mortgages have come a long way since the financial crash of 2007/08. Providers that adopted an over-cautious approach in the fallout of the crisis appear to have regained their appetite to lend, and are doing so at higher LTV levels. What is more, mortgage rates remain low and ever competitive – thanks to record low base rates and new lenders entering the fray. This is all very good news for borrowers.