Mortgages  

TSB ups rate for 10-year mortgages

TSB has hiked rates by up to 0.20 percentage points across its range of low LTV 10-year fixes, while reducing rates for people with smaller deposits.

The lender said the increase is in line with recent moves across the market.

The rate of interest for 10-year fixes for homemovers at up to 60 per cent LTV and between 60 and 75 per cent LTV have been upped by 0.20 and 0.10 percentage points to 3.34 per cent and 3.49 per cent respectively.

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At between 75 and 80 per cent LTV, the rate has seen a slight increase from 3.74 per cent to 3.79 per cent.

For those looking to remortgage their property, the rate for up to 60 per cent LTV has risen by 0.20 percentage points to 3.39 per cent, and 0.15 per cent to 3.54 at between 60 to 75 per cent LTV.

The rate decrease is only applicable to homemover loans north of 80 per cent LTV and remortgage products above 75 per cent LTV.

A discounted rate of 4.09 per cent is applicable to 10-year homemover fixes at between 80 per cent and 85 per cent LTV.

Meanwhile, at between 85 and 90 per cent LTV, the rate has fallen by half a percentage point to 4.44 per cent.

Ten-year fixed-rate remortgages at between 75 per cent and 80 per cent LTV have also been reduced to 3.79 per cent, and 4.14 per cent for products between 80 and 85 per cent LTV.

All homeowners who remortgage their property with TSB are offered free valuations and standard legal costs. Customers with a TSB bank account receive £150 cashback when remortgage with the lender

Provider view

Roland McCormack, TSB intermediary director, said: “Our 10-year fixed-rate mortgages offer all the advantages of a great rate, fixed over the long term, yet with the flexibility to move after five years should the customer’s circumstances change.”

Adviser view

Commenting on the rate increase on the 10-year fixed-rate mortgage at up to 60 per cent for homemovers, Asif Sadullah, chartered financial planner at Yorkshire-based Pen-Life Associates, said: “Financial advisers will have to have a particular type of client to recommend a mortgage product that ties them in for 10 years. If you have a client who is not looking to move or borrow extra cash over this time frame, then this product could be useful.

“You will need to get your crystal ball out to see whether the rate would represent good value in the future – 3.34 per cent might not look great in two years.

“I predict that TSB is increasing its rate for low LTV 10-year fixes purely for commercial reasons. I’m guessing it has seen a lot of demand for the product, so if it can get more out of it then why not?

Charges

All of TSB’s 10-year fixed-rate homemover and remortgage products are fee-free.

Verdict

Increasing rates are always going to be met with groans from mortgage seekers who probably regret not applying for the same loan weeks earlier at a discounted rate. As the adviser above mentioned, the move is likely to be down to commercial factors – there have also been too few announcements from other providers unveiling that they will follow suit.