This morning Tesco Bank announced details of some attractive new mortgage deals, including some very competitive fixed rate pricing for those with at least 40% equity.

The 2 year fix comes in at 1.74%, 3 years is priced at 2.29% and 5 years at 2.49% – all with fees of £1495 (£1300 product fee and £195 booking fee).

Looking at the five year fixed rate deal in a little more detail, it’s up against the 2.74% Norwich & Peterborough Building Society mortgage with a much smaller £295 fee.

On the basis of a 25 year term and a mortgage of £150,000 then the N&P deal is slightly cheaper over the 5 year fix, but for anything above £150k, then the low rate on the Tesco deal starts to make it a more viable proposition despite the larger fee.

The cost of home loans seems to be edging lower week by week but it’s interesting to see just how much the cost of borrowing has decreased if you look at the last six months.

Back in December the best 5 year fixed rate deal was 3.19% with a £499 fee – on a £250k mortgage this would have set you back £73159 over the 5 year term, whereas the latest 2.49% (£1495 fee) offer from Tesco Bank will set you back £68695 – a saving of over £4460 – almost £75 per month.

The rate cuts from lenders seem to be getting smaller and you wonder if we’re almost at the stage where rates are bottoming out – for those customers sitting on an SVR of 4% or more, now’s the time for a long hard look at some of the longer term fixed rates on offer.

As ever with the vast array of mortgage rate and fee combinations available it’s wise to employ the services of an independent mortgage professional to crunch the numbers and find the most suitable product for your particular circumstances.

Interest free terms on best buy credit cards just keeps getting longer, however with some card providers you may end up getting offered a much shorter interest free term than the headline grabbing advertised deal implies.

This week NatWest increased its 0% balance transfer term to 26 months but as in previous instances when a rival matched its longest deal Barclaycard reacted within a matter of hours with an enhanced term, this time 27 months to maintain its treasured number one spot in the best buy tables.

It’s already fairly well known that some card companies operate personal pricing policy whereby up to 49% of successful applicants could find themselves being accepted for a particular card but end up with a rate of up to 11% higher than the advertised representative APR.

A practice that many people will be less aware of unless they take a closer look at the credit card summary box information is that some providers will offer a much shorter introductory 0% term for some customers.

In a number of instances as you’ll see from the table below, the 0% term actually offered can be less than half of the headline deal shown in the best buy tables.

Although with personal pricing 51% of successful applicants must be given the advertised rate, there’s no such restriction on down selling lower 0% periods – it therefore begs the question how many people are fortunate enough to get both the advertised rate and headline 0% term.

A worst case scenario for someone who is accepted for the latest Barclaycard 27 month balance transfer deal is they end up with 12 months at 0% and an APR of 29.9% – an almost unrecognisable product compared with headline 27 months and 18.9% APR.

The initial rollout of the three new current account options will be run as a pilot in 29 branches across East Anglia before being rolled out to the rest of the country in 2014.

Consumers will be able to choose from a Standard account, a Packaged account and a Control account.

The Standard account comes with a debit card and can be opened with a balance of £100. There’s no interest paid on credit balances however the authorised overdraft interest rate of 14.9% EAR is amongst the most competitive on the market. It’s good to see that Post Office hasn’t gone down the route of daily fee charging for overdrafts and also that there will be no charges for unauthorised overdrafts.

The Packaged bank account charges £8 per month and includes European multi trip travel insurance and Vehicle Breakdown Cover – the full details of these policies have not yet been released so it’ll be interesting to see how comprehensive these add-on products are and how they stack up against competitor products. Again the interest rate for overdrafts is a very impressive 14.9% EAR.

The Control account is aimed at those who don’t want to incur expensive unauthorised banking fees and unpaid charges. This account costs £5 per month and whilst it gives people access to online banking, telephone banking and a nationwide network of ATMs, there is no debit card available with this account. Avoiding unpaid fees may help some people, but others are likely to balk at paying £60 per year for a basic bank account.

Verdict

There’s nothing particularly exciting with these products, but then many people are just looking for something that does the job, no bells and whistles, just a no-nonsense account without hidden or excessive fees, all backed up with consistently good customer service and a system that doesn’t keep falling over due to IT issues.

There’s no reason why the Post Office shouldn’t become a major competitor in the current account market, but much will depend on its ability to build a reputation for reliable customer service across its huge network of 11,500 branches.

The big news in the last nine months is how the Funding for Lending Scheme (FLS) has, thanks mainly to the efforts of the building society sector, driven down mortgage interest rates, even for those with smaller deposits.

While this is a positive outcome, albeit at the expense of retail savings rates, the housing market still needs a healthy dose of innovation to help those who require something other than a vanilla mortgage product.

It was refreshing to see Barclays helping address the issue of raising a deposit for first time buyers earlier this year via its ‘Family Springboard’ mortgage where family members deposit 10% of the property price in a linked savings account, leaving the homebuyer to come up with a more manageable 5% stake.

The Chancellor also delivered some new initiatives of his own as well as endorsing the use of shared equity lending products in his March budget when he unveiled the Help to buy programme.

This will open some much needed new avenues to existing homeowners and first time buyers as well as giving the construction industry a much needed shot in the arm to boot.

There is an equity loan Help to Buy scheme available now where consumers can purchase a new build home with a 5% deposit whilst borrowing a further 20% interest free from the government.

From April 2014 the Help to Buy guarantee scheme comes into play whereby homebuyers put down between 5% and 20% by way of deposit while the government provides the lender with a guarantee for up to 15% of the loan.

The details of this scheme are still to be finalised, and it will be interesting to see how the pricing stacks up when the time comes.

The Castle Trust Partnership Mortgage continues to help people buy their own home (not newbuild) and with stubborn inflationary pressures and meagre pay increases the order of the day, it remains a viable option for those looking to keep monthly repayments down in order to fund other essentials.

People wanting to help pay for their children’s university education for example, or relocate to a home with extra living space for a growing family have the opportunity to do so without putting excess pressure on the family budget.

I reiterate my original warning that prospective Partnership Mortgage borrowers need to fully appreciate the potential impact of future price fluctuations on the equity in their home before signing up and that the product may not be suitable if you live in an area where house prices are volatile.

On the topic of house prices, London has again been the area where house prices have outstripped the rest of the country over the last 12 months.

If you take the latest figures from the Land Registry for example, property prices in the capital are up 9.6% in the last 12 months, whereas in other major cities including Birmingham, Leeds, Manchester and Sheffield prices have remained flat or even fallen slightly.

The lower cost of borrowing courtesy of the FLS has undoubtedly helped to keep the mortgage market ticking over during 2013, but more innovative solutions from lenders are needed to help borrowers overcome the problem of high property prices and relatively low income multiples.

ENDS

A fortnight is a long time in the Cash ISA world, particularly in the present climate when banks and building societies just don’t have the appetite for savings balances.

In the last 14 days we’ve seen ISAs from Santander, Leeds BS, Coventry BS and Tesco Bank either withdrawn completely or have rates cut on what were best buy products.

The table above shows what’s left on offer today – nothing to get too excited about I’m afraid, but at least the tax-free element still makes these products more rewarding than standard savings accounts.

Here’s the current Cash ISA best buy table as it stands at 10.00am 12th April 2013

Just when savers thought things couldn’t get any worse,  Santander has surprisingly withdrawn two of its best buy ISAs just two days into the new tax year.

The timing of this announcement will be a bitter blow to many savers who had probably earmarked these competitive accounts as a home for their 2013/14 ISA allowance.

Usually the best buy Cash ISA deals are in place long enough to cater for people who invest at the end of a tax year as well as those who subscribe within the first few weeks of the next, hence the Santander move will have caught many people on the hop.

The Direct Saver instant access ISA paying 2.50% has been substituted with a new version paying just 2.00% whilst the table topping 2 year fixed rate major ISA paying 2.80% has been pulled and not been replaced.

It seems that the Santander focus is on existing 123 customers who are still able to apply for the 2 year fixed rate ISA at an enhanced rate of 3.00%.

Building societies now dominate the Cash ISA best buys with Coventry Building Society (Poppy ISA) at 2.60% heading the pack for instant access tax free savings while for fixed rate accounts Leeds BS is top for one year at 2.45% and Nationwide BS offering the best deal for two years at 2.50%.

CLICK HERE for the updated ISA Best Buy Table 08 April 2013

Latest ISA product changes;

• 5th April – Coventry BS reacts to Leeds BS ISA and increases Popy ISA rate to best buy 2.60% – available from 6/4/2013
• New instant access ISA 2.55% and 1 year fixed ISA (with limited access) 2.45% from Leeds BS from 6th April
• New 2.50% instant access Poppy ISA from Coventry BS available from 6th April – plus 0.1% donated to Royal British Legion
• Coventry BS 60 day notice ISA at 2.80% withdrawn 27th March 2013 

With the tax year crossover fast approaching there are more new accounts being launched and changes to Cash ISA interest rates.

The link below shows you all the top deals from instant access through to 5 year fixed rate ISAs, plus a column showing you how much interest you could earn by investing the 2013/14 tax-free allowance of £5760 for a full 12 month term.

I’ll be updating this table on a regular basis over the next few weeks.

It’s been well documented how the government’s Funding for Lending Scheme (FLS) has had a devastating effect on savings interest rates.

However, if by any remote chance the Chancellor wants to repair some of the damage and restore the interest income levels to those of 12 months ago it would involve increasing the tax free allowance for ISA savers by as much as £2510 rather than the already agreed £120.

Because interest rates have slumped so dramatically, in some instances the ISA allowance would need to be increased by more than 20 times the £120 planned rise, to enable savers to invest enough to earn the same interest return.

For example the best 1 year fixed ISA this time last year paid 3.25% and would have delivered an interest rate return of £183.30 over 12 months. The best 1 year fixed ISA rate is now just 2.25%, so to earn a return equivalent to last year you’d need a Cash ISA balance of £8150.

Even if the ISA limits were hiked by such levels, there would be many people who simply wouldn’t be able to find the extra cash needed to take advantage of a larger allowance.

A Cash ISA increase of these proportions isn’t going to be something George Osborne will have on his Budget must-do list, but it’s time for a serious look at the damage his FLS scheme is having on savings returns for millions of UK consumers.

TABLE WITH EXAMPLES AND CALCULATIONS HERE

ENDS

Many people have focused on what’s happened in the savings and mortgage markets in the four years since base rate was cut to 0.5%, but it’s interesting to see how the 0% balance transfer market has changed in that time.

In March 2009 there were 52 0% balance transfer offers with the average term at 9.6 months whereas today there are 71 interest free cards with the average 0% term now standing at 14.2 months.

As evidenced in the table below, Barclaycard and MBNA have been battling tooth and nail to offer the longest term and these two main players appear to be dragging the rest of the market with them.

There are now 19 credit cards offering 0% BT terms of 20 months or longer.

Consumers shouldn’t blindly opt for the card with the longest term unless they intend on using it for the full 0% offer period.

It’s not uncommon for people to switch to 0% and then switch away again or repay the balance well before expiry, so for many people the balance transfer fee is the key area they should be focusing their attention on if they want to keep costs to a minimum.

This table shows that by opting for a few months less than the table topping 24 or 25 month term, the savings in terms of BT fee can be quite substantial for those switching a decent sum of say £5k or more.

With the average credit card rate pushing 18.5% APR for new borrowers, there’s some serious money to be saved if you’re disciplined enough to manage your interest free borrowing carefully, but don’t think that the extra number of long term offers makes it any easier to get accepted.

Lending criteria remains strict and  if you haven’t got an A1 credit record, don’t waste your time in applying.

LONG TERM 0% BALANCE TRANSFER CARDS – Ordered by size of BT FEE