What the papers say- 16th September 2009

What the papers say- 16th September 2009

The Times reported today on the launch of a new tracker mortgage by the Woolwich. The deal, which runs at 1.48% above Barclays Base Rate for 1 year followed by 2.49% above for the remaining term, currently undercuts the recent HSBC deal, and it is hoped that this could bring a much needed element of competition back into the mortgage market.

Experts pointed out however that fewer than half of new borrowers will qualify for the Woolwich deal, which requires a 40% deposit and a minimum loan of £200,000, and demonstrates the continuing trend of lenders cherry picking their customers. One year on from the collapse of Lehman Brothers, and the Daily Mail looked at the impact this has had on our finances.

In borrowing terms, the average house price has fallen by £14,000, reducing equity and ultimately the number of mortgages available to borrowers. Savings rates have also dropped significantly, and consumer choice has been restricted by takeovers and Government rescue plans. The Daily Mirror meanwhile revealed that despite falling interest rates a reported 403,000 borrowers are now at least 3 months behind on their mortgage. Experts warned that repossessions are set to increase as unemployment rises later this year.

For those with the means to reduce their mortgage, the Daily Mail suggested that they may be hundreds of pounds better off by putting their money into a fixed rate bond or similar savings account rather than being tempted by low mortgage rates.

Elsewhere savers were urged to carefully check the terms and conditions of new savings accounts before signing up, as many come with restrictions on when money can be deposited and withdrawn. Bonuses may also vary, and some providers do not allow existing savers to transfer to new deals.

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