| Nationwide launches 25-year fixed-rate mortgage
The Nationwide Building Society has become the UK's first big mortgage lender to launch a 25-year fixed-rate mortgage deal. The 5.49 per cent rate deal comes with an arrangement fee of 599 but does not charge a redemption fee after the first 10 years. Stuart Bernau, Nationwide's executive director, said: "At Nationwide we are totally committed to our members because we have no shareholders to please. "Our new 25-year fixed-rate mortgage is a clear demonstration of this. "It not only offers long-term good value to borrowers looking for the security of fixed payments but also the flexibility of a 10-year deal." Figures released by the Council of Mortgage Lenders (CML) show that fixed rate deals have grown in popularity in the past few months as a result of higher interest rates.
It’s hold for now but inflation continues to be the key
Ray Boulger of John Charcol, UK Independent Mortgage Adviser, comments on today's decision by the Monetary Policy Committee (MPC) to hold Bank Rate at 5.25%.
“Today's decision probably resulted from another split vote and a 0.25% increase to 5.5% next month is widely expected by the market. However, this is far from a foregone conclusion, particularly in the light of the voting at last month's meeting, where there was one vote for a cut and none for an increase. It is notable that it was Prof David Blanchflower who voted for a cut and, as he spends much of his time in the USA, he will be much more aware than the other MPC members of the potential damage to the US economy from the dire problems in their housing market, and the risk of contagion to our economy if the situation deteriorates significantly.
Tamweel may sell $1.1b of sukuk to fund expansion
Dubai: Dubai mortgage lender Tamweel could sell as much as $1.1 billion of Islamic bonds by the end of the third quarter to fund expansion, the company's chief executive said yesterday. The money will be used to boost its mortgage finance business in the UAE and to expand into Egypt and Saudi Arabia, the largest Arab economy, Adel Shirawi told Reuters. Tamweel plans to sell $500 million of Islamic bonds, or sukuk, and $300 million of convertible sukuk, which will give investors the right to exchange the bonds for Tamweel's shares, he said. Islamic bonds are typically backed by physical assets that pay a dividend or rent to bondholders rather than interest, which Islam equates with usury. "The $500 million sukuk could be finished in six months, and the convertible faster than that," Shirawi said.
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