Introducer Today

By Introducer Today editorial director Victoria Hartley

New two-year fixed and tracker rates hit the market this week like a flurry of snowflakes.

The launches included fixed and trackers from Northern Rock and Co-Op Financial Services under the Britannia Building Society brand extended its two-year fixed range. Abbey For Intermediaries also plumped up its two-year tracker range yesterday.

The funding position is clearly better for lenders. Swap rates reportedly continue to trade at the low end of their range and saving rates have come down signalling lenders are less desperate for deposits. But it is good old-fashioned competition encouraging the rifle gun fire-like product launches, says mortgage guru Ray Boulger.

“Remortgaging is slowly picking up and so lenders are starting to price to achieve their lending targets. If one moves, others follow, because each lender’s strategy will be affected by what the others are doing,” says Boulger.

Council of Mortgage Lender figures show UK lenders did GBP 145bn of business last year and it predicts a similar if marginally higher figures GBP 150bn in 2010.

But as the market under the 75 per cent Loan to Value threshold picks up, those sitting on SVR are finally thinking about moving. The market hit rock bottom a while ago and the only way is up from here, says Boulger.

But fresh energy will still be injected as new lenders launch in the UK mortgage market. Mutterings continue about who will be first and I’ve heard several names as reputed to be “no more than a month” away from mortgage launch.

But when they come, whoever comes first and however aggressively, any new lender will bring that ripple effect. Mortgage magazines may be excited about who launches first, but the market wants to take a look at the products. The better the products, the bigger the interest from other lenders and the more intense the fight for market share. This game of follow the leader will be well worth watching.