Abbey indicates some important changes to their mortgages

An announcement from Abbey today indicates that from 15th September 2008 they will be cutting their mortgage rates and fees on their 85% mortgage deals as well as adding new products to the range.

They are introducing new Fixed and Tracker remortgage products up to 85% of property value, as well as reducing rates and fees on their current 85% loan to value range.

With green shoots of competition returning to the market, Abbey has also announced the introduction of a special mortgage product available through select intermediaries only. The mortgage will be a 5.64% 3 year Fixed rate available up to 60% of the property value, and will come with a £995 lender arrangement fee.

In addition the Abbey 3 year Fixed 60% loan to value Large Loan product up to £5m will reduce by 0.36% to 6.09%, and their Flexible Offset maximum loan size will increase to £1m.

At the same time as changes to the Abbey mortgage range, they will be also be removing the £150 upfront part of their booking fee allowing customers to capitalise the full amount of the fee if they wish. Whilst no detail has been provided Abbey has also announced that there will be small changes to the Abbey valuation policy to avoid disappointing customers whose mortgage valuation falls marginally short of the product they are applying for.

Jerry Figueroa-lee, Operations director at The Mortgage Warehouse commented, “We have seen growing completion in rates over the last few weeks which is a good sign, but down valuations by some valuation companies have been ridiculous. The move by Abbey to make part of their arrangement fee payable upfront and non refundable was very unpopular with intermediaries, and so it is refreshing to see Abbey realise their mistake and be big enough to reverse it.”

He further commented, “Now Abbey just need to ensure their valuers reflect true market movements, rather than reflecting pessimistic media forecasts that do not tally with Land Registry data or even well known indexes provided by other lenders.”

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