Accord cuts high LTV mortgage rates

Accord cuts high LTV mortgage rates

Accord Mortgages has cut the rates on its high loan-to-value mortgages by up to 0.2 percentage points.

The lender's 90 per cent LTV rates now start at 2.04 per cent for a two-year fixed rate mortgage.

This rate is available for purchases and remortgaging and comes with a £995 completion fee.

A further 90 per cent LTV mortgage for purchases is available at 2.78 per cent fixed for five years, which comes with £1,000 cashback and free standard valuation.

For borrowers with a 5 per cent deposit a two-year fixed rate is available at 3.18 per cent for house purchases.

This comes with £1,000 cashback, free standard valuation and a £495 completion fee.

Jemma Anderson, mortgage manager at Accord Mortgages, a Yorkshire Building Society subsidiary, said: "We're confident our new mortgage range will be welcomed by brokers whose clients have smaller deposits, and with our 95 per cent range of remortgages available for capital raising too they could also benefit people looking to improve their home rather than move."

Accord also changed its offset mortgage range, which allows borrowers to use the interest accrued on their savings to reduce the amount of interest they pay on their mortgage.

Remortgage rates on these products now start at 1.99 per cent for a two-year fixed rate at 75 per cent LTV. This comes with £250 cashback, free standard valuation and free legal lees, with a £995 completion fee.

For purchases the product is offered at 2 per cent interest.

Ms Anderson said: "While offset mortgages may not suit all borrowers and therefore cases may be few and far between for brokers, we do still see appetite for them in the market, in particular for those who could afford to repay on a capital and interest basis, but choose only to repay the interest.

"With reduced rates, the ability to significantly overpay without penalty and options available on an interest-only basis, offset mortgages could provide additional options for brokers whose clients have savings to explore."

Accord's interest-only products are available up to 75 per cent LTV.

The deals have no minimum loan amount but require £200,000 in equity if the sale of the property is used to repay the loan.

Ray Boulger, senior mortgage technical manager at John Charcol, said Accord's cuts were further evidence of competition driving down rates in the high LTV sector.

He said: "Although cheaper rates are available on 95 per cent LTV two-year fixes, once the £1,000 cashback and free standard valuation is taken into account Accord's rate of 3.18 per cent will be very competitive for some borrowers.

"However, the free valuation shouldn't lull purchasers into a false sense of security about the valuation and it will often be worth paying a little extra to upgrade to a homebuyer’s report.

"Accord is one of the few lenders offering a good range of offset mortgages on a fixed rate basis and so it is encouraging to see the offset range improved.