Risk limitation is the key feature of many of today's mortgage changes. Sub-prime was the first casualty, with vastly tightened mortgage credit criteria and rate changes. Now it seems that the self-certification mortgage market, both for prime and sub-prime mortgage borrowers, is also beginning to feel the pinch.
For prime mortgages, Alliance and Leicester have increased their self-certification mortgage fixed rates from 6.24% to 7.74%, with the fee remaining at £1999; and Scarborough Building Society have increased their self-certification fixed mortgage rates from 6.04% to 6.19%, with the fee remaining at £995.
For light adverse self-certification mortgage fixed rates, up to 75% loan-to-value, Mortgages PLC have increased their two-year fixed rates from 7.82% to 8.75% and have also increased the fee from 1% to 1.5%. Scarborough Building Society's light adverse two-year fixed rate self-certification mortgage rates, for up to 70% loan-to-value, have increased from 6.69% to 7.94%, with the fee changing from £1495 to 1%.
By withdrawing self-certification mortgage products, increasing rates or requiring larger deposits, self-certification mortgage lenders are displaying a risk aversion to self-certificated loans in the current climate. Higher risk mortgage borrowers will be finding it increasingly difficult to secure a mortgage, particularly at an attractive interest rate. It pays more than ever to search the market thoroughly to find the best deal for your individual circumstances.
Best buys - Mortgages
Best buys - Self-certification Mortgages
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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