By ADRIAN LOWCOCK 10/07/2009
Nationwide re-introduces 125% mortgage
This week Nationwide have brought back the 125% mortgages which were seen as the symbol of reckless lending that contributed to the banking crisis and collapse of Northern Rock. Eligibility will be strictly limited and is only available to existing customer with a good credit history and are looking to move house. The mortgage is designed to help those stuck in negative equity to move home.
The terms of the mortgage are customers can borrow up to 95% of the value of their new home at a fixed rate of 6.73% for three years and can transfer the negative equity in the existing property to the loan, capped at 30% of the value of the new home at a rate of 7.23%
Interest rates remain unchanged
The Bank of England surprised markets by announcing no increase in its quantitative easing scheme as it left interest rates unchanged, at a record low of 0.5%, for the fourth month running. The Bank of England has been buying assets with £125 billion of newly created money since the initiative was announced in March and is set to complete its programme at the end of the month. It was initially authorised to print as much as £150 billion but has not opted to use the extra amount.
Consumer confidence rises in June
The Nationwide consumer confidence index rose to 58% in June, from 54% in May, indicating people became more optimistic about the future of the economy. The increase was driven by expectations the economy will be better in six months time than it is today.