UK HOMEOWNERS WILLING TO REMORTGAGE

UK HOMEOWNERS WILLING TO REMORTGAGE..... BUT ONLY IF THE PRICE IS RIGHT research by the uk's largest ifa identifies the remortgage trigger point - £58 - and reveals that some 4.5 million mortgage holders could potentially save over £3bn in monthly mortgage payments Research by The MarketPlace at Bradford & Bingley, the UK's largest IFA, reveals that the average UK homeowner would only be prepared to remortgage if they could save £58 a month.¹ Conducted by independent research agency NOP, this "trigger point" reflects a desire among homeowners to remortgage to save money rather than to necessarily increase their debt. The MarketPlace also reveals that some 4.5 million mortgage holders could potentially save over £3bn in monthly mortgage payments if they switched from their current SVR rate onto a market- leading deal.² Commenting on the findings David Bitner, head of product operations for The MarketPlace, said: "Our research shows that homeowners are increasingly waking up to the fact that they can make real savings on their monthly repayments by remortgaging onto a more competitive deal, with £58 being revealed as the crucial trigger point." In this current low interest rate environment, £58 a month savings can be achieved comparatively easily. A borrower with a £100k repayment loan (on an average SVR of 5.65%) would just need to remortgage onto a deal less than 1% cheaper (0.98%) to achieve savings of £58 a month. In fact, savings far higher - over £100 per month - can realistically be attained. For example, even taking into account potential costs, those with a repayment mortgage of £100,000 on an average SVR could save over £105 a month (more than £2,500 over 2 years) by remortgaging onto a current market-leading 2-year tracker product.³ Bitner continues: "Remortgaging should be an integral part of people's financial planning and borrowers should be reviewing their mortgage regularly to see what savings they can make by switching. This is especially important given the subdued state of the stock market at present, along with low investment rates and dwindling pension funds - people need to make their money work harder and make savings where they can. Remortgaging can not only give people extra money in their pockets but can also help with lowering their mortgage debt through overpayments, boosting their pension fund or assisting with their future protection or investment needs." Remortgage to offset the 1% hike in National Insurance Contributions National Insurance Contributions have increased by 1% which means people earning the national average wage of approx. £24,000* a year will see their annual contributions swell from £2,400 to £2,640 - £240 extra a year. Consequently many homeowners may need to cut back on their expenditure, dig into their savings or find extra money to counter the rise. By remortgaging onto a more competitive deal, the monthly savings that can be achieved will more than offset the NI rise. By taking the £58 trigger point, for example, the average annual NI increase can be negated in just over 4 months. David Bitner concludes: "With National Insurance contributions up by 1% many homeowners will be need to tighten their belts and remortgaging is an easy way to cut their monthly outgoings. Moreover, with interest rates still at historically low levels and many lenders offering attractive fees free deals, now is the perfect time for individuals to re-evaluate their mortgages and assess the potential savings on offer." To spur borrowers into seeing how much they could save, The MarketPlace is offering borrowers an obligation free review of their current mortgage arrangements. It gives homeowners the chance to see whether they can get a better deal than the one they are currently on and to see how much they could benefit by switching. Borrowers can ring 0800 11 33 33 or pop into their nearest Bradford & Bingley branch. BEST BUY REMORTGAGE TABLE Fixed/Capped Rates Lender Current Until Max Lend Early Max Notes Rate LTV er Redempt MIG Fee ion Fre Charge e Market 4.29% 3 years 95% Nil 5% in 3 85% Free Place years valuation exclus and free ive legals GMAC 3.49% Fixed to 90% £395 3% to 90% Interest 01/06/05 01/06/0 calculated 5, can daily. repay up to 25% p.a. penalty free Covent Capped A plus 95% £295 None 90% Daily ry at 1.24% interest. 3.99% BBR Free tracker valuation until and free 31/12/08 legals. , with a Minimum rate 3.99% payable cap 2.99%. until 31/12/05 Covent 4.45% 31/12/08 95% £295 None 90% Payrate is ry Capped 1.2% at discount. 5.60% Free valuation & free legals Discount/Tracker Rates Lender Current Until Max Lend Early Max Notes Rate LTV er Redempt MIG Fee ion Fre Charge e Market 3.74% Bank 90% £99 6 90% Open plan. Place Base - months Free exclus 0.01% to interes valuation, ive 30/04/05 t at free legals. tracker rate. Can repay up to 25% p.a. penalty free Stroud 3.59% 2% 95% £345 4% in 2 95% 3.09% & discount years, collar. Free Swindo for 2 can valuation up n years repay to £600,000, up to £430 25% in reduction total after. Free penalty legals. free Interest calculated monthly. Leeds 3.75% Bank 75% £395 None 75% Lender fee & Base is 0.35% for Holbec Rate to loans over k 01/05/06 £113,000. Interest calculated annually. Newcas 3.65% Bank 85% £295 None 85% Offset. tle Base - Interest 0.1% for calculated 6 daily. months, then Bank Base + 0.50% for term Borrowers looking to finance their dream home can visit www.marketplace.co.uk, contact The MarketPlace free on 0800 11 33 33 or pop into any branch of Bradford & Bingley. - ENDS - Notes to Editors: ¹ Research carried out by NOP, on behalf of The MarketPlace, amongst a nationally representative sample of GB adults aged 18+ between 14-16 February 2003 via the telephone. £58 is the average amount that adults with a mortgage would consider it worthwhile saving by remortgaging, if the savings were less than £150 per month. ² 4.5 million homeowners is calculated by taking the total of UK mortgage holders (11.25 million) and taking away the number of homeowners expected to be still languishing on their lenders' SVR (40%). The £3bn savings figure is then calculated by taking the monthly savings people on an average £60,000 loan could make by switching from an average SVR onto a market-leading tracker (please see below for product details) - almost £67 and multiplying it by the 4.5 million mortgage holders. ³ The average SVR used in these examples is 5.65% and the market-leading deal is a 2-year tracker product (MarketPlace exclusive funded by Woolwich). Current pay rate of 3.74% (Bank Base rate - 0.01% to 1/3/05). Max LTV: 90% and MIG free to 90%. £99 arrangement fee. Free valuation and free legals. ERC: 6 months interest at Bank Base Rate - 0.01% to 1/3/05. Can repay up to 25% p.a. ERC free. £49 booking fee, credit broker fee 0.4% of loan, minimum £200. Calculation assumes rates will remain the same for the term of the mortgage. Current rate of 5.65% based on Halifax's current SVR. * Source: National Office of Statistics. Average national wage is £465 per week. MarketPlace credit broker fee: 0.4% of sum borrowed, min £200 (no fee online). A booking fee of £49 will be charged at application on all exclusive and shared exclusive mortgage products and may be refunded if the application does not proceed. Full typical examples available on request. Loans termed exclusive to Bradford & Bingley Group. Mortgage secured on property. Min age 18. Insurance may be required. Loans subject to status, type and value of property. Written quotations available on request. A borrower's home is at risk if they do not keep up repayments on a mortgage or other loan secured on it. For further information please contact: Bradford & Bingley Press Office or David Bitner Vicky Luttig / Drew Wotherspoon Head of Product Operations 0207 067 5634 / 5632 0207 611 7001 07977 277426 (m) Amy Fisher/Stacey Haddon, Lansons Communications 0207 294 3609 What is £58 a month: § 2.85% increase in the average national wage § Monthly gym membership to a top club § Luxurious massage § Couple of theatre tickets § One FA Cup final ticket § Meal for 2 in a nice restaurant § 10 bottles of wine § New pair of shoes § New hair style § £696 per year - could be used to increase savings pot / fund home improvements / pay for trip abroad or a stay in a health farm. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2003/04/11/20030411BIT00900/wkr0001.doc http://www.waymaker.net/bitonline/2003/04/11/20030411BIT00900/wkr0002.pdf