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  • Mortgages & Finance

    Mortgage Express 5 Year 3.99 Fix

    Mortgage Express have launched a new re-finance product, to existing MX account holders only.

     

    It is a fix of 3.99 % until 31.3.2016 and is available to account holders with up to 95% LTV. (2.5% arrangement fee added to mortgage)

     

    For those with higher LTV's, the rate is 4.49% (no arrangement fee)

     

    No ERC's

     

    However this is a 5 year term - therefore you need to sell, redeem, or remortgage by the end of the term.

     

    Contact your portfolio manager to apply.

     

    Glenn

     

    http://www.NationalPropertyGroup.co.uk

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    MX's business plan is to effectively redeem their mortgage book for the benefit of tax payers.

     

    In doing this, they obviously want to make sure landlord's stay afloat, and redeem the mortgages. So this product aims to cover both of those angles. The arrangement fees are 2.5% for the 3.99% product and nothing for the 4.49% product. 

     

    There is also a £295 booking fee which will cover admin/valuation.

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    Glenn,

     

    This is good business for MX - I can see alot of people taking it who dont understand that at the end they HAVE to remortgage or sell. A good idea for some though. Glad they are doing something rather than just asking you to move your mortgage. It seems an attractive rate.

     

    Interestingly, if the base rate is 2% by 2015 (as mentioned on another thread) - 4.25% on a variable by that time would be questionable if its worth it. 

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    Hi

     Just call MX and they dont know what this is.?

    Can you confirm this is a valid product?

    Rob

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    Rob, Do you have a Mx representative? Mine emailed me the offer but it had no details of rates - maybe they have forgotten about sales & marketing!

     

    It said ring the office or him - office Bradford & Bingley plc^ ( Tel Office 08448 921 887 )

     

    Any problems, post again

     

    Marc

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    Definitely a valid product. I was informed of this today by my portfolio manager who confirmed all the rates as detailed above. It is "hot of the press", so it might not have filtered out to everybody yet.

     

     

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    Glen, i had a look on there website and there is nothing on it.
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    Philip, as a posted above - my portfolio manager emailed me but didnt have any rates!

     

    Yes, its genuine - think they have forgotten the art of sales & Marketing. There is a phone number in my earlier post.

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    Hi Marc

     

    Thanks for that, as you say they have forgotten the art alright. do you really think interest rates will stay that low for so long?

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    I have received this further infomation;

     

    The deal is restricted to portfolio (5+) customers and is not being advertised generally due to limited availability. Info is available via the portfolio admin team on 0844 892 1887 rather than the general helpline numbers

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    See below.Marc Smith said:

     

    This is good business for MX - I can see alot of people taking it who dont understand that at the end they HAVE to remortgage or sell. 

    If the customer cannot read the terms of the loan agreement and their solicitor does not point out the material facts what do you want lender to do? The details will be fully disclosed in the documents to be reviewed and signed. The borrower is going to sign to indicate they agree to operate as set out in the agreement.
    Anyone who has 5 or more loans with MX and who does not know how to read a loan agreement gets what they deserve.

    James Hayes said:

    More importantly, what does this tell us about how Mortgage Express are thinking?

    Good question
    James Hayes said:

    (1)  It indicates that they know that customers are worrying about rising interest rates and that they want customers to come off of trackers and onto higher fixed rates.  Presumably it also means that they believe that 3.99% is more than the average that people on SVRs and trackers will otherwise pay over 5 years.  I prsmue that this means that they have few people paying - say - 3% SVR, and many paying 1 or 2% on a tracker.  It also gives us an indication of how much (or rather how little) they think base rates will rise.

    I would not draw the same conclusions. I think Glenn has already nailed it when he said the MX focus is to run the loan book down. MX is not there to make money as much as they are there to return the money to the taxpayers. While they do not want to lose money there is a risk reward issue in terms of rate rises and then having borrowers default.

     

    MX does not need to show a profit. They are mostly being judged on their plans to go out of business in an orderly fashion with the maximum amount of money returned to the taxpayers.

     

    Being able to offer a 5 year fixed rate loan means they have been able to borrow or lock in some 5 year money. They might be losing a bit each month as a trade off to not having more defaults where they will lose more through a repossession process. Remember that anything they lend out is borrowed from somewhere else so they have a cost of funding. They also have government masters who have a bigger agenda than simple cash flow.

    James Hayes said:

    (2)  It indicates that they think that mortgage availability might be terrible for years - ie banks will not want to lend for years.  They are already thinking up ways to get rid of customers in five years time!!!!

    I read this as they want to be out of business as soon as is practical. They are a zombie bank rather than a going concern. They would not mind selling off the loan book to a going concern. At the same time they could provide incentives for the existing borrowers to pay off earlier than the current loan terms dictate and then close the business (no sale of the loan book).
    Do not read too much into this in terms of the wider market. MX is not part of the wider market. They went out of business a couple of years ago and this is just an orderly shut down or a zombie institution. They have a huge loan book and the taxpayers want their money back.
    John Corey
    Follow me on Twitter-> https://www.twitter.com/john_corey
    https://www.ChelseaPrivateEquity.com/blog
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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.