End of 100 Percent Mortgages

Abbey announces end of 100% mortgages!

In a recent development, Abbey announced the withdrawal of its 100% mortgage deals. This decision can lead to a whole new change in the market. For starters, it could mean an end of 100% mortgage deals.

Though, this effect would not be permanent. This turn also reflects a change in market trend. In fact, it has come as a clear reminder of the condition of credit crunch in the market, which has started from past one year.

Abbey’s decision has come on close heels of Halifax’s policy. It has been in the news as it announced that only those who are prepared to put down 25% or more for their loans will get the benefits. It runs to the fact that customers would have to pay 0.35% more. These changes would surely be adopted by the Bank of Scotland and Intelligent Finance mortgage brands.

Though, it would not apply to the existing customers. Re-pricing is likely to be a new feature as concluded from a few past weeks.

In yet another turn of event, the Council of Mortgage Lenders (CML) has announced that the popularity of tracker rate mortgages has considerably risen up in February. It may have been a result of a fall in the proportion of borrowers choosing fixed-rate loans. It touched its lowest in March 2005 as it reached 52%. In fact, there was an increase of 2% in the number of borrowers who choose tracker-rate loans. It increased considerably from 33% to 35%.

Moreover, house loans decreased by 3.5%. CML also expects remortgaging to remain stronger and likely represent a higher percentage for the future. It can be attributed to the fact that the number of borrowers have considerably increased and would continue to be so. All it may be due to the come off fixed and discounted rates in 2008.

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