Mortgage News Bristol And West Withdraws Mortgages And First Direct Raises Cheapest Deal
20 June 2008 / by Rachael Stiles
Mortgage customers will be left even higher and drier this week, as yesterday Bristol & West withdrew a quarter of its mortgage range and First Direct raised the rate on the country’s cheapest two year fixed rate mortgage.
On Tuesday, Bristol & West launched a number of new products, only to withdraw seven of its 29 home loans a day later – primarily fixed rate and buy-to-let mortgage deals – because of the “unprecedented volumes of business received during the past week”.
The re-pricing will push the lender’s cheapest buy-to-let deal past seven per cent, to 7.19 per cent for a three year fixed rate, and will carry a £799 lending fee. It is only open to landlords and requires a 25 per cent deposit.
First Direct – which just a month ago reinstated its mortgages after withdrawing its entire range in April – has also increased the rate on what was, until yesterday, Britain’s cheapest mortgage deal, raising it from 5.49 per cent to 5.99 per cent. Borrowers will still need to put down a 20 per cent deposit and pay a fee of £1,499.
This follows news that six million families in the UK are struggling to keep up with their mortgage payments as energy bills, food prices and transport costs continue to rise, so this will only exacerbate the already desperate situation faced by people trying to remortgage or get a foot on the property ladder.
Mortgage borrowing is already down almost 20 per cent on last year, according to the Council of Mortgage Lenders. In May 2007 total lending stood at £31.5billion, while May 2008 saw it fall to £25.5billion.
The average two year fixed rate mortgage is now 6.75 per cent, Moneyfacts said this week, making it the most expensive for 10 years.
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