Intermediary only lender Accord Mortgages has unveiled a two-year fix for borrowers with a 35 per cent deposit rate reductions on a host of deals.
The two-year fix to 65 loan-to-value (LTV) is available at 1.25 per cent for house purchases and comes with a £995 product fee.
The discounts apply to two-year fixes across its 65 per cent, 75 per cent, 80 per cent and 85 per cent LTV by up to 0.10 per cent.
Highlights include a 48 month fix to 75 per cent LTV for housebuyers with no upfront fee and £250 cashback on completion and free standard valuation.
For remortgage customers, a two-year fix to 80 per cent LTV has been discounted to 1.47 per cent, with a 995 fee and £250 cashback on completion and free standard valuation.
At 85 per cent LTV, a two-year fix is now available at 1.52 per cent with a £1,495 fee and free standard valuation – available to housebuyers and remortgage customers.
It has been a busy month when it comes to product launches for the lender, which is part of the Yorkshire Building Society.
The society has also unveiled a two-year fix to 65 per cent LTV at 1.66 per cent and a five-year fix at 2.24 per cent to 75 per cent LTV. Both mortgages come with free standard valuation and free legal fees, and have no upfront product fee.
Provider view
David Robinson, national intermediary sales manager at Accord, said: “Our new 65 per cent loan-to-value home loan is the third new lower loan-to-value mortgage we have launched in the last 10 days.
“We’re pleased to have made further reductions on our two-year fixed rate mortgage range. Many borrowers are looking for competitive short-term fixes at the moment, so our new offerings should appeal to borrowers with differing budgets.”
Adviser view
Robert Lewis, operations director at Heritage Financial Solutions, said a 1.25 per cent is a headline rate. The product fee is not a big ask also. You can see that interest rates are unlikely to go up in two years. If they do go up, it won’t be by much. Lenders know this too, hence why Accord and a number of other lenders have sought to make their two-year fixes more attractive. The uncertainty of Brexit means base rates are likely to remain at record lows.”
“I would say that 70 to 80 per cent of mortgages we have looked for recently have been longer-term fixes. We are in a period where inflation has crept up, which means the cost of living is rising. Knowing that the monthly mortgage repayment will not change for the duration of the fixed-rate period is invaluable for many.”
Charges
Ranges from no upfront charges to £1,495.
Verdict
Inflation is creeping up, which means a hike in interest rates is pending, right? Not necessarily, according to industry commentators. Inflation now stands at 2.3 per cent, but this is likely to be driven by the fall in sterling in the wake of the Brexit vote. This, along with concerns over Brexit, is likely to result in the persistence of low base rates.
Lenders are therefore faced with the task of shifting two-year fixes that are waning in popularity, if Mr Lewis’s comments are anything to go by. Many may choose to make rate reductions and/or add bells and whistles in the form of free standard valuation onto products to tempt borrowers.
