Accord Mortgages has made rate cuts for its residential clients, for those with smaller deposits, and for specific new-build purchases.
From tomorrow, Wednesday 16th August, the intermediary-only lender has reduced selected 95% loan-to-value (LTV) products by up to 0.80%.
Additionally, its 2-year Deposit Unlock products have reduced by up to 0.12%, and its 5-year Deposit Unlock products will be reduced by up to 0.10%.
Accord also announced new cashback deals, including two 5-year fixed products with £2,000 cashback.
Simon Garner, mortgage manager at Accord, said: “We’re constantly reading market conditions and looking for every opportunity to offer brokers products that will help their clients with the increased cost of living and a generally higher interest rate environment.
“We endeavour to provide them with as much value and choice as possible to suit a range of circumstances and anticipate the £2,000 cashback products could be particularly appealing for first-time buyers who would welcome a financial boost to contribute to furnishing their new home.”
In light of these further reductions, UK news agency, Newspage, sought the views of brokers, their responses can be seen below.
Reaction:
Stephen Perkins, managing director at Yellow Brick Mortgages:
“Accord has heavily reduced its offering to those with low deposits, making the amount that such borrowers can obtain, and the monthly cost of the mortgage, much more beneficial.
“This is very welcome and encouraging news and will no doubt see other lenders look to counter, with the biggest winner being potential home-buyers and movers.
“Cashback will certainly help some buyers also with the property purchase costs, should that be a priority for the borrower.
“Hopefully, the forthcoming inflation data does not lead to these being pulled on the day of release over fears of a Bank of England reaction.”
Peter Stamford, director and lead adviser at Moor Mortgages:
“In a much-needed positive turn for buyers with smaller deposits, Accord is taking the lead with significant rate reductions, particularly for those with a mere 5% deposit.
“While the lure of cashback offers, boosted by Accord in a move mirroring Virgin, offers potential relief for home movers, it’s essential to evaluate overall costs.
“Barclays has also jumped aboard with similar high loan-to-value rate benefits.
“As fixed rates see enticing rollbacks, this surge in lender incentives could mark a burgeoning trend in a usually tepid period.”
Ranald Mitchell, director at Charwin Private Clients:
“This is exactly the kind of lender innovation the broker community needs.
“Big rate reductions, high loan-to-value and generous cashback all help to unlock a section of mortgage seekers, home movers and first-time buyers that is badly underserved in the current market.
“Competition amongst lenders is heating up for market share, and making positive moves in the low deposit arena is massively welcome.
“It makes a change from the usual lenders fighting for the safe end of the market.”
Rob Gill, managing director at Altura Mortgage Finance:
“These are big cuts from Accord, and at higher LTVs showing not just a willingness to compete but confidence in the property market, too.
“Lenders are having to be increasingly innovative to attract business, and barring any surprises with this week’s inflation figure, the rate cuts and innovations look set to continue.”
Kundan Bhaduri, property developer and portfolio landlord at The Kushman Group:
“The rate war has formally begun among lenders, and whilst this is positive news for residential customers from Accord, we believe this will also usher more competitive rates into the buy-to-let market very soon.
“The average 2- and 5-year residential rates are the bellwether in the mortgage industry and clearly with more lenders coming forward to announce sharp cuts to rates, there is now evidence that average rates are on their way down.
“It certainly looks like the mortgage market has turned a corner.
“This will be welcome news for landlords who have in recent months been punished by extraordinarily high stress tests and eye-gouging product fees.
“Eventually, this is great news for the housing market because it will no doubt bring momentum back to the sluggish property sales market.”
Riz Malik, founder and director at R3 Mortgages:
“Accord has followed Barclays with more rate reductions, even for individuals with minimal deposits. Lenders are striving to boost applications during one of the year’s more subdued periods.
“While tracker rates aren’t seeing advantages now, those seeking fixed rates are greeted with more encouraging pricing rollbacks.
“Accord has also followed Virgin by increasing the amount of cashback available on certain deals. This could be the start of a trend or some clever accounting.”
Justin Moy, managing director at EHF Mortgages:
“It’s great to see some positivity for those buying with smaller deposits.
“There has been plenty of focus on low-risk / low loan-to-value lending recently, so full marks to Accord Mortgages for helping those with just a 5% deposit with a considerable reduction in rates.
“The cashback options may be ideal for home movers that need a bit of extra cash on completion.
“Just check the overall cost of those deals and don’t be blinded by the money, as you may end up paying more in interest.
“Your broker will be able to check those figures and advise accordingly.
“Other lenders may follow, with Barclays just announcing similar high loan-to-value rate improvements.”
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“Accord is back in business for first-time buyers.”
“No doubt they’ve realised this is the only type of business they’re going to be transacting in the coming months as landlords sell, movers wait and remortgagors cry.”
Amit Patel, adviser at Trinity Finance:
“Fantastic news for borrowers with smaller deposits who can now reap the benefit of rate reductions, as long as they meet the lender’s criteria.
“The £2,000 cashback offering is very appealing and will cover some of the transaction costs incurred by the applicant.
“However, it should be noted that these products do tend to have marginally higher rates of interest so the overall cost over the mortgage term might be more expensive, but rate reductions are welcome and competition is always healthy.”
Gary Boakes, director at Verve Financial:
“This is a smart move from Accord.
“Rate reductions are always positive news but targeting the higher LTV is a sign to the first-time buyer market that the doors are still open for you.
“With rising rents, the cost of a mortgage in most instances is still looking very comparable to its rental counterpart.
“Hopefully, this news will filter through and get people looking on Rightmove again.”
