Bank of China Enters UK Mortgage Market
Sunday, August 2, 2009 10:55
Foreign competition has already transformed the UK savings market. Dutchowned ING Direct, Turkish Akbank and Indian-owned ICICI have all made a big impact in Britain.
This time, first-time buyers and people struggling to find mortgage finance may be thrown a lifeline by the Bank of China. Last week the State-owned commercial bank, which is the world’s third-biggest, announced that it would offer loans to UK borrowers. The rates are competitive at 2.5 percentage points above the base rate on a lifetime tracker; while the buy-to-let borrowers will pay 3.5 points above base.
But, there is a 1% fee and conservative income multiples applied to new borrowers. Besides, the mortgages must be taken out on a repayment rather than interest-only basis. And applicants have to meet a mortgage adviser of the Bank of China in Birmingham, Edinburgh, Glasgow, London or Manchester.
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