P534 ORACLE 534 Sat29 Jul C4 2200:01  1/5     Home loan deals  by Carol Oliver Despite high interest rates, mortgage lending is rising according to latest building society statistics. While some of this is accounted for by people remortgaging, there is still a demand for new mortgages. For although the bank base rate is still at 14%, people seeking new mortgages are finding they can get a rate well below that. The main schemes include fixed rate deals, deferred interest and discount offers. more follows > Your Money guide 530 Tax data 535 The recipe page is now on p614 Your Tax You Write Feature City
P534 ORACLE 534 Sat29 Jul C4 2200:11  2/5   Home loan deals  Fixed interest rate schemes are not new, generally fixed for between two and five years. At the moment, rates are in the 12.4% to 12.75% band. The advantages include getting a lower than market rate now (13.5% to 13.8%) and knowing what the repaxlents will be for a fixed amount of time. However, interest rates are considered to be at or near the peak (so the experts say!) so the rate could look expensive when rates do fall. Most schemes are also dependent on you buying an endowment or pension through the lender. more follows > Your Money guide 530 Tax data 535 Your Tax You Write Feature City
P534 ORACLE 534 Sat29 Jul C4 2201:01  5/5   Home loan deals  Interestingly, one class of borrower being attracted to these three schemes is those caught out by the higher rates central lenders are now charging. Some of these rates are now well over 14%, and in some cases nearer 15%, so remortgaging at rates around 12.5% makes sense even with the valuation and legal costs. Now turn to page 532 to see which lenders are offering the special deals among building societies, banks and the insurance companies. more > Your Money guide 530 Tax data 535 Diversions! A new mag on p610 Your Tax You Write Feature City
P534 ORACLE 534 Sat29 Jul C4 2201:02  3/5   Home loan deals  A newer product on the market, and gaining popularity, is the deferred interest scheme. The exact formula varies between lenders but basically you put off part of the interest until later in the loan when the accumulated unpaid interest is then added to the loan. Often the amount you can borrow exceeds the normal three times the main income plus the second, but the minimum loans are also usually higher. Don't confuse it with low-start schemes for first-time bqxfrs whose re——xlfnts increase gradually over a period. more> Your Money guide 530 Tax data 535 Your Tax You Write Feature City
P534 ORACLE 534 Sat29 Jul C4 2201:11  4/5   Home loan deals  The third type of cheaper home loan is a straight discount off the lender's basic mortgage rate for new borrowers. Recently a number of lenders launched an offer which slices 1% off the prevailing mortgage rate for a year, but with conditions attached. These include being available only to first-time homebrxfrs or to any new borrower providing the loan is either endowment backed or insurance is bought Discounts of this size, though, offer rates comparable to the fixed rate schemes but without the risk of looking expensive if rates fall. more > Your Money guide 530 Tax data 535 Your Tax You Write Feature City