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Mortgage of the week
21 January 2008
21 January, 2008
If your clients are leaning away from fixes but apprehensive about the risk they take with a tracker product, especially now the Bank of England's Monetary Policy Committee (MPC) has publically acknowledged the creeping rate of inflation, then capped rate mortgage products could be a viable alternative.
BM Solutions' three-year product with a fixed maxiumum rate of 5.89 per cent has grabbed Mortgage Talk's attention this week, offering borrowers the necessary flexibility in times of lower interest rates, but a degree of certainty should the base rate begin to climb once more. MORTGAGE TALK'S PRODUCT OF THE WEEK
BM Solutions is currently offering a tracker product capped until 1 June 2011 at a maximum rate of 5.89 per cent, reverting to the standard variable rate for the remaining term of the mortgage, currently 7.94 per cent.
The overall cost for comparison is 7.8 per cent APR. An Early Repayment Charge is payable if you repay all or part of this mortgage during the capped rate period. There is a valuation fee of £365 and an arrangement fee of £1,250 which can be added to the loan.
Short-term fixed rate
The Halifax is offering a fixed rate deal until 28 February 2010, at a rate of 5.69 per cent, reverting to its standard variable rate for the remaining term of the mortgage, currently 7.5 per cent.
The overall cost for comparison is 7.6 per cent APR. An Early Repayment Charge is payable if you repay all or part of the mortgage during the fixed rate period. There is a valuation fee of £315 and an arrangement fee of £999.
Long-term fixed rate
The Norwich & Peterborough BS is offering a five year fixed rate, at a rate of 5.58 per cent, reverting to the standard variable rate for the remaining term of the mortgage, currently 7.49 per cent.
The overall cost for comparison is 7 per cent APR. An Early Repayment Charge is payable if you repay all or part of the mortgage during the fixed rate period. There is a valuation fee of £220 and an arrangement fee of £495 that can be added to the loan.
Short-term discount or tracker
The Nationwide is offering a two year tracker scheme at the Bank of England base rate plus 0.08 per cent, equating to 5.58 per cent, reverting to the standard variable rate for the remaining term of the mortgage, currently 6.99 per cent.
The overall cost for comparison is 7.1 per cent APR. An Early Repayment Charge is payable if you repay all or part of this mortgage within the incentive period. There is a valuation fee of £295 and an arrangement fee of £599 that can be added to the loan.
Long-term discount or tracker
The Norwich & Peterborough is offering a five year discounted scheme at 1.55 per cent off its standard rate, equivalent to a current rate of 5.94 per cent, reverting to the standard variable rate for the remaining term of the mortgage, currently 7.49 per cent. The overall cost for comparison is 7.1 per cent APR.
There is an early redemption penalty upon repayment of this loan up to the end of the discount period.
There is valuation fee of £220 but no arrangement fee.
Cashback
The Abbey is offering a five year tracker mortgage at the Bank of England base rate plus 2.09 per cent, currently 7.59 per cent, with a 5 per cent cashback on completion.
The overall cost for comparison is 8 per cent APR. There is a requirement to repay the cashback on early repayment of the loan within the incentive period. There is a free valuation and no arrangement fee.
Buy-to-let
BM Solutions is offering a fixed rate deal until 1 June 2011 at a rate of 4.99 per cent, reverting to its standard variable rate, currently 7.5 per cent, at the end of the period.
The overall cost for comparison is 7.3 per cent APR. An Early Repayment Charge is payable if you repay all or part of this mortgage during the term of the loan. There is a valuation fee of £390, while the arrangement fee of £2250 can be added to the loan.
There is no guarantee that it will be possible to arrange continuous letting of the property nor that the rental income will be sufficient to meet the cost of the mortgage.
Remortgage
For those looking to remortgage, the Nationwide is offering a tracker at the Bank of England base rate plus 0.53 per cent for two years, currently equating to 6.13 per cent.
The overall cost for comparison is 7.10 per cent APR. This mortgage offers a free valuation, free legal work and no arrangement fee.
Your existing lender may impose penalties if you switch your mortgage to a new lender.
Lifetime tracker
The Norwich & Peterborough is offering a lifetime tracker deal at the Bank of England base rate plus 0.39 per cent for the full term of the loan, currently equating to 5.89 per cent.
The overall cost for comparison is 6.2 per cent. There is no Early Repayment Charge on this loan, but there is a valuation fee of £220 and an arrangement fee of £599, which can be added to the mortgage.
100 per cent mortgage
The Bristol & West is offering a fixed rate deal until 28 February 2011, at a rate of 6.09 per cent, reverting to the standard variable rate at the end of the term of the mortgage, currently 7.59 per cent.
The overall cost for comparison is 7.6 per cent APR. An Early Repayment Charge is payable if you repay all or part of this mortgage during the discount period. There is no valuation fee, but an arrangement fee of £499 that can be added to the mortgage.
Figures based on £150,000 purchase price or value and £100,000 repayment mortgage over 25 years. All figures are subject to revision, but current at time of going to press.
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