Good news for those seeking a mortgage comes from the Abbey National, where fees on their flexible mortgage products will be GBP1,000 lower than they were at just GBP1,499.
The Abbey National flexible mortgage deals allow customers to offset their savings against their mortgage, pay more than is required and also take holidays from paying for periods of time. The benefits of such mortgages are supreme flexibility and the chance to clear a mortgage in a much shorter time than a regular one, saving many thousands of pounds in the process by paying less interest.
Although the flexible mortgage deals offered by the Abbey are very good ones there are question marks over how many people are actually buying property at the moment, so there may be a bigger market for them with existing homeowners who are coming off a fixed rate deal.
The recent suggestion about the Alliance and Leicester being taken over by a larger European financial institution has been seen as both a good and bad thing by some experts.
On the one hand the Alliance and Leicester having strong financial support from a much bigger player would instil confidence in customers and probably drive more people to use them. That is a short term scenario though, with the potential longer term one being a market that has less choice.
When organisations join together there is a natural culling of duplicate products and a streamlining of the range – this would be no different with the Alliance and Leicester it has been suggested. Less choice means limited options for mortgage buyers and the likelihood that costs will ultimately be higher.
The fact that Northern Rock is making repayments back to the Bank of England for the bail out loan it received seems, on the face of it, to be good news, though it could prove to be detrimental to the mortgage market as a whole.
It has been suggested that Northern Rock is only able to have overpaid on what it owes to date because it has effectively withdrawn from the mortgage market and has received significant sums of money by calling in the home loans. In the very short term it allows Northern Rock to get ahead on their payments, but in the future this means there is less money available in the mortgage market.
If there is less money available to borrow for mortgage customers then the cost of borrowing can rise further, fuelled by demand outstripping supply. Northern Rock mortgages may well come back into the market in the future but at the moment these are worrying times.
