Top Mortgage News

nigel woollsey

Nigel Woollsey

Online Writer
Published: 21/01/2020

The Cambridge Building Society has recently announced that it is launching a new range of Credit Assist mortgages, with the aim of targeting residential customers who have a history of missed payments, County Court Judgements (CCJs) or defaulting on credit agreements.

This new range of mortgages replaces The Cambridge Building Society’s previous Home Solutions mortgage products.

Customers will have a choice of either a fixed rate or discounted rate option on both new products, the Credit Assist Mortgage and Credit Assist Mortgage Extra.

The two new mortgage products carry different qualifying criteria, with the Credit Assist Mortgage being available to consumers who have missed up to five payments in the last two years on credit card, mail order or utility bills, as well as those who have unsatisfied defaults within the last two years.

The Credit Assist Mortgage Extra offers hope to customers who have a more challenging credit history, specifically those with three or more unsecured loan repayments, two missed secured loan repayments, as well as CCJs or those who have unsatisfied debts up to £5,000.

Neither of the new mortgage products are likely to be easily suitable to first-time buyers as a minimum of 15% equity is required for the Credit Assist Mortgage options, which rises to 30% equity for the Credit Assist Mortgage Extra products.

Tracy Simpson, head of lending, commented: “At the Cambridge we’re committed to introducing solutions that help a wide range of customers, and our newly launched Credit Assist range specifically aims to help those mortgage customers who have experienced credit issues in the past and who are finding it difficult to secure a mortgage. Credit Assist helps these customers get back on track. In addition, our experienced team review each application on an individual basis, which provides the highest level of support.”

The Cambridge Building Society offers mortgages for residential properties in Bedfordshire, Buckinghamshire, Cambridgeshire, Essex, Hertfordshire, Norfolk, Northamptonshire and Suffolk.

For a more in-depth treatment of home-buying options for those with a poor credit background, take a look at our dedicated guide: Obtaining a mortgage if you have a bad credit history. In addition, our mortgage comparison charts give you the low-down on the latest deals across the whole UK marketplace.

Despite not many changes happening in the mortgage charts this week, competitive rates remain at the top of all the charts, with low rates available across loan-to-value (LTV) deals. Saying this, it is important to remember that when looking for the best mortgage deal, the lowest rate might not be the best option. Instead, borrowers should take into account a wide range of factors when choosing a mortgage deal, including product fees, incentives and flexible features.

Competition in the five year fixed mortgage market has intensified over the last few years, resulting in more mortgage deals available for those who raise a minimum 25% deposit in the five year chart than the typically more competitive two year chart.

In fact, data in Moneyfacts UK Mortgage Trends Treasury Report (soon to be published) shows that there are currently 610 five year fixed rate mortgage deals available for those with a 25% deposit or more, which is 18 more than the number of two year fixed rate deals (592) available. In comparison, five years ago, the number of two year fixed rate deals available outnumbered five year deals by 148 and, even just a year ago, there were 17 more two year products than five year deals to choose from.

Commenting on this data, Darren Cook, finance expert at Moneyfacts.co.uk, said: “It is clear from our analysis that over the past five years, the availability of five year fixed rate mortgages has grown at a quicker pace than the two year fixed rate availability for lower LTV products. Intense competition among mortgage providers seems to have resulted in the two year fixed rate market becoming saturated, margins becoming squeezed and mortgage providers looking to entice borrowers to consider a longer five year fixed rate deal as an alternative.

“Healthy competition within the five year fixed mortgage rate market is good news for borrowers, as an increase in the number of available products will generally push rates down and introduce longer-term options that borrowers may have not previously considered.

“Five years ago, the average two year fixed rate mortgage at 60% LTV was 2.17% and the average five year fixed rate at 60% LTV was 3.10%, meaning that a borrower would have needed to pay a premium of 0.93% when considering an alternative five year deal. This average premium has now reduced to just 0.26%, with the average two year fixed rate at 60% LTV falling to 1.81% and the five year average falling to 2.07%.

“Historically, borrowers seemed to have preferred the short-term commitment of a two year fixed rate deal, but now that product availability has significantly increased in the longer-term five year mortgage market, borrowers may be looking beyond interest rates and more towards the stability of setting monthly mortgage repayments and hedging themselves against uncertain economic conditions in the longer term.

“As with any mortgage, it is important that borrowers weigh up the overall true cost of any deal and make sure that a longer-term deal is suitable for their specific needs.”

Virgin Money has launched a range of fixed rate residential and buy-to-let mortgage deals that are available at the same interest rate for a two or three-year initial term.

The mortgage sector has seen a slow start to 2020 with little activity at the top of the charts. Saying this, after a highly competitive mortgage sector last year, there are still extremely competitive rates for borrowers wanting to take out a mortgage or who are looking to remortgage.

When looking for the best mortgage, borrowers should keep in mind that the lowest rate available might not be the best mortgage deal for their needs. Instead, borrowers should consider a range of factors such as product fees, incentives and flexible features, when choosing a mortgage deal.

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