Moody’s has downgraded the credit ratings of Santander owned Abbey and Alliance & Leicester (A&L). The company reassessed the banks owned by the Spanish Santander group along with a number of other UK building societies, such as Nationwide.

The downgrading has been made on the basis that the UK property market will peak-to-trough fall of 40%. The Banking Times has reported that Moody has concerns that these lenders involved do not have the strength needed to absorb the losses in the property market, and they will struggle to keep on making profit in today’s mortgage market.

Abbey

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Five Across the Eyes move has had its Bank Financial Strength Rating (BFSR) cut to C- from C+, A&L’s BFSR has been cut to E+ from C+ and Nationwide The Poet download has seen its rating reduced from B to C-. Chelsea Building Society has also been downgraded, its BFSR amended from C to E+. It’s All About Love movie

Four of these lenders have said that their SVR will never be more than one percent above the base rate. Abbey

failed to pass on the full rate cut in February, so it came as no surprise that they would not pass today’s rate cut in full.

Most of the other lenders have stated that their rates were now under review, we would have to wait and see what the other big lenders plan to do. Banks and building societies have warned that they also need to consider their savers; it is their deposits that allow them to lend money for mortgages.

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The Spanish owned Bank, Abbey (LON:ANLA) raised its tracker Mortgage rates yesterday, pushing its two-year tracker mortgage product up by 0.25 percent, this comes despite the interest rate cut and the Libor rate falling.

The new Abbey tracker rate will be set at 2.24 percent over base interest rate currently at 2 percent. Previously the tracker was at 1.99 percent over base. However with the interest rate being cut if you took out this tracker you would pay 4.24 percent interest on your loan.

Abbey owned by Santander have also hiked up the lenders fee on the product from £995 to £1,495 you will also need a 25 percent deposit.

This hike comes despite the Libor rate falling 50 basic points last week, the Libor is the interest rate used for banks to lend to each other in the wholesale market to fund the tracker mortgages.

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Barclays (LON:BARC) mortgage arm, Woolwich and Abbey (LON:ANLA), owned by Santander the Spanish banking giant have slashed their rates for the second time since the Bank of England cut the key interest rate by 1.5 percent.

All of the main UK banks have come under criticism recently after they dismissed the urges by the government to kick-start the economy by passing the rate cut onto their customers.

Abbey has now slashed its 5-year fixed rate deal by us much as 0.45 percent, putting its best rate at 5.04 percent. However this is only available for borrowers with 60 percent Loan-to-Value, this particular deal holds an arrangement fee of 5.04 percent. Abbey has also reduced its rates on both 2 –year and 3-year fixed rate products.

Woolwich, Barclay’s mortgage arm, has cut its mortgage rates by up to 0.7 percent, putting its best fixed rate at 4.29 percent for a two year fixed. Woolwich has also introduced a new range of Tracker Mortgage. The lifetime tracker mortgage from the Woolwich is at 4.99 percent. Although you will still need a hefty deposit to benefit from either of the products above.

Source: fairinvestment

Alliance & Leicester joined Abbey and Lloyds TSB and announced new tracker mortgage deals yesterday, the move came after the 1.5 percent interest rate cut from the Bank of England last week. Most Lenders withdrew their existing tracker mortgage products in light of the cut, but the new tracker deals are few and far between and unless you have at least 25 percent deposit (75 percent LTV) you will be hard pushed to find one.

With the two tracker mortgage deals Alliance & Leicester are offering you would need a staggering 40 percent deposit to qualify, the starting rate is 1.89 percent over base or 4.89 percent and you would have to pay 1 percent of the loan value as an arrangement fee. However A&L have said they feel their products are competitive.

Lenders are still increasingly reluctant to provide affordable deals, unless you have a huge deposit, which sadly many people don’t have you will have to hold fire and see what happens, the Government has continued to stress the urgency to banks to help home owners, although it seems at present nothing is being done.

Source: Telegraph

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Abbey who are owned by Spanish banking giant Santander will be offering from tomorrow new tracker deals, being the first to re-launch mortgage products that are pegged to the base rate. Almost every bank and building society including Abbey withdrew their Tracker deals after the Bank of England cut the base interest rate by 1.5 percent last Thursday.

However if you are a homeowner and was looking to cash in on the 1.5 percent interest rate cut you will be left disappointed, the new rates launching tomorrow (November 12) with Abbey are up by 0.7 percent.

Abbey will be offering a two-year tracker at a interest rate of 1.99 percent above the bank of England Base rate which is at 3 percent, so you would be paying 4.99 percent if the interest rate stays at 3 percent. There are other clauses on the deal, you have to have 75 percent loan-to-value or 25 percent equity, and the loan size is capped at £250,000.

Although the full rate cut hasn’t been passed onto the tracker rate by Abbey, it is still cheaper than when the base interest rate was at 4.5 percent, they were offering a Tracker last Thursday before they withdrew it at 1.29 percent above the base so you would have been paying 5.79 percent, if they had continued offering the same Tracker product now then you would be paying 4.29 percent.

Lloyds TSB and its mortgage arm Cheltenham & Gloucester are expected to launch their new tracker products along with Halifax.

Source: timesonline

Santander the Spanish bank who owns Abbey, Bradford & Bingley’s saving business and Alliance & Leicester is now under immense pressure to raise capital to stay ahead of its European competition who took the Government bailout.

Santander turned down the Governments cash hand out, and decided to move £1 billion from another part of its company to its UK business which boosted the tier-one ratio for Abbey and A&L to around 9.25 percent.

However, Santander’s group tier-one ratio does not look that good now at a much weaker 7.89 percent and its core tier one ratio at a low 6.31 percent, considering the average European major bank average being over 9 percent for core capital, according to analysts at Merrill Lynch.

But with the Spanish property market falling and the country heading for a recession it raises concerns if it can withstand the pressure from both continents within this global financial crisis.

Source: Independant

Last night Abbey agreed that they would pass on the full 1.5 percent interest rate cut to their customers, making them the second bank to follow the move from Bank of England Monetary Policy Committee yesterday in an attempt to fight off the recession and improve our ailing economy.

Abbey who are owned by Spanish bank Santander will now join Lloyds TSB and its mortgage arm Cheltenham & Gloucester in being the only two banks to pass on the interest rate cut to their customers. Reducing their Standard Variable Rates which will affect Tracker Mortgages and borrowers with loans linked to the banks SVR. However, Lloyds TSB were under a legal obligation to cut their SVR through a clause in their terms and conditions that there SVR could not be more than 2 percent over the Bank of England’s base interest rate.

The banks listed below are coming under fire from the Government and British Public and being branded by the press as “Greedy Banks” these banks are Royal Bank of Scotland (RBS), HSBC, Alliance & Leicester, Nationwide, Northern Rock and HBOS have not passed on the rate as yet and have said that their SVR are under review.

The UK Government said that the Banks have a duty to their customers and the government to pass on the rate cut, Alistair Darling the Chancellor said the cut was put in place to help the British public by putting more money in thier pockets in an attempt to get the economy moving again.

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Abbey will increase its Tracker rates tomorrow by 0.5 percent, ahead of the expected rate cut from the Bank of England’s Monetary Policy Committee on Thursday. The Spanish owned bank blames competitors repricing for its rate increase. However some would say they are pushing their rates up before the Bank of England reduces its rate to soften the blow to Abbey’s Tracker mortgage rates.

It’s widely expected that the Bank of England will reduce the base interest rate down to 3.5 percent which would be a 1 percent interest rate cut.

Banks such as HSBC have already stated that they will not pass such a large cut to borrowers. Abbey’s increase of its tracker rates has been criticized as a similar pre-emptive move. However Abbey did reduce the rates on its fixed-rate deals by up to 0.35 percent last week.

Abbey is not alone in mortgage rate increases, Northern Rock and Nationwide have increased their rates, and Halifax have increased the rate on its 5 year tracker by 0.5 percent and withdrawn both its 2 and 3 year tracker products.

Source: mortgagestratergy

Abbey and Alliance and Leicester who are both owned by Spanish bank Santander have cut all its mortgage rates on all home loans that have a 60 or 75 percent loan-to-value and fixed deal mortgage products from October 31.

Abbey said the move will put the lender will give it the number one spot on the best buy tables for all two, three and five year fixed rate mortgage deals for home loans at 75 percent or less Loan-to-value (LTV).

Director of Abbey Mortgages, Nici Audhlam Gardiner said that the mortgage business is gone from strength to strength despite the challenging market conditions as seen in the results published earlier this week.

Both Abbey and A&L will be cutting rates on all the two, three and five year fixed rates deals by up to 0.35 percent.

Source: failinvestment