Mortgages  

Newcastle Intermediaries’ fixed rate deal has 2021 in its sights

Newcastle Intermediaries has unveiled two new five-year fixed rate deals as part of a wider revamp to its range of mortgage products.

For borrowers with a 15 per cent deposit, a fix lasting until 31 October 2021, is available at 2.70 per cent with no reservation or completion fees.

The rate applicable at 90 per cent LTV is 3.3 per cent. The deal also comes with no reservation or completion fees, as well as a free standard valuation.

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August was an active month for the lender regarding product launches.

Newcastle has also recently revised its range of two-year fixes available exclusively for self-employed borrowers who have been trading for two years and under.

The range offers free valuations on properties up to and including £500,000, and is available through all the lender’s key account distributors.

An individual case assessment is applied, with either one year’s accounts or an SA302 (tax calculation) form requested, not both.

Steve Carruthers, head of mortgage distribution at Newcastle Intermediaries, said: “We understand that it can still be difficult to find a lender that understands the needs of self-employed clients, especially those still in the early stages.

“This new range with lower rates further supports these individuals.”

Provider view

Mr Carruthers, said: “We are pleased to launch a new range of mortgage products which offer borrowers the opportunity to fix their rates for a significant period in an ever changing market.

“Our five-year products could be ideal for those homeowners looking for certainty with their monthly payments, or first-time buyers taking their first step on the housing ladder.”

Adviser view

Dan Clayden, director at Devon-based Clayden Associates, said: “Both deals seem competitive. A lot of lenders tend to release new deals in the week before the monetary policy committee meet. I think many providers try to preempt the outcome of the meeting. It would seem that Newcastle believe that base rates are unlikely to go up at any point in the near future. If anything, rates will drop but only slightly.

“There is a 0.6 percentage point difference between the rate applicable to the deal at 85 per cent LTV and the 90 per cent LTV, which is quite substantial. It would probably be in the borrower’s interest to save for a little bit longer for the cheaper rate.”

He added: “Five-year fixes are incredibly competitive. For those who are midway through their five-year fix at a rate of five per cent or over, it might be more economical for them to weather the redemption charges and to take out a new deal.”

Charges

No reservation or completion fees.

Verdict

The already competitive fixed rate mortgage arena has been bolstered, from the borrowers’ point of view, by the advent of lower base rates. A vast number of people are likely to fix now while mortgage rates are still low for a longer term, for the peace of mind factor. However, a number of industry commentators have speculated that base rates could decrease further still. The real winners, it would seem, are those who opted for a two-year tracker a year ago.