There is without doubt something stirring in the mortgage market.
The combination of rising swap rates (swap rates are the borrowing rates between financial institutions and have an impact on fixed rate pricing) and lack of lender competition is starting to have an immediate impact on the buy to let mortgage market. As per Monday’s rate alert email the Lloyds group, and in particular BM Solutions, have increased their fixed rates significantly.
The uncertainty about where interest rates are heading also means there is very little choice should you want a long term fixed rate (e.g. 5 years plus). For those people who are borrowing 60% or less then there are some quite attractive remortgage deals out at the moment.
Tip of the week 1 – Advantage are offering 25% off current loans to move.
We have had a couple of investors tell us this week about letters they are receiving from the lender (who are no longer lending) – Advantage Homeloans. Early conversations seem to indicate they are prepared to offer a massive 25% discount off the current loan if you move your mortgage to another lender. They will also waive any early redemption penalties and mortgage administration fees. If this has happened to you then please do contact us and we will help to move your mortgage to another lender so you can take advantage (forgive the pun) of this incredible offer.
Tip of the week 2 – Are you are currently paying life assurance each month but its not in a ‘trust’ – this tip alone could kill you!
We always provide a full review for our clients which often touch upon how you are protecting your mortgage. The pattern we are seeing is that many of you have got life cover in place but because it was provided from either their bank or a previous source it hasn’t been setup in perhaps the most suitable way. What do we recommend? Well in most circumstances we recommend you put your policy into trust. Why? Well here are two major benefits
1, Quicker payment of claims.
If someone dies and their plan is not in a trust, their representatives will have to obtain Grant of Representation before they can deal with the plan. This can take several months.
2, The plan proceeds may be free of inheritance tax.
At the moment inheritance tax is payable at 40% on any part of an estate valued over £325,000 (2009/2010). But you can use a trust to gift some or all of the benefits on the plan to other people. The gifted benefits would no longer be part of your client’s estate if they die, which means these benefits would not be subject to inheritance tax.
Our advisers can review your current payments and make sure it is setup with you the property investor in mind.
