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A head turning fix from Godiva

Godiva Mortgages – Residential 2.99% 3-Year Fixed

Type: Fixed-rate mortgage

Fixed term: Until December 31, 2013

Fixed rate: 2.99%

Minimum loan: £10,000

Maximum loan: Up to 60% of valuation subject to a maximum of

Income multiples: Based on affordability

Conditions: Capital repayments of up to 5% a year allowed without penalty in the fixed-rate period, one free valuation up to £650, free legal fees for remortgages if the Society’s solicitors are used

Arrangement fee: 1.5% of the original loan plus £199 booking fee

Redemption fee: 4% of the amount repaid in the first three years

Introducer’s fee: Subject to negotiation

Tel: 0845 7573612

This three-year fixed rate deal is available for mortgages up to 60 per cent of valuation.

London & Country Mortgages head of communications David Hollingworth says: “Coventry Building Society has supported the intermediary sector wholeheartedly and fared better in the market than many of its mutual peer group.”

Hollingworth sees this rate as a head turner that should appeal to people who want to fix longer than two years, with some flexibility and to avoid a five-year lock in. He thinks this deal offers what advisers have come to expect from Godiva, with a free valuation plus free legal work for remortgage. “It also allows up to 5 per cent a year overpayment without penalty, perhaps not the most generous but likely to be sufficient for many.”

The downside of such a low interest rate in Hollingworth’s view is that there is some trade off in the fee. “Godiva generally sticks to flat fees but in this case the arrangement fee is set at 1.5 per cent of the loan, which will effectively add 0.5 per cent to the pay rate each year. The usual £199 booking fee is charged on top of that.”He also mentions the maximum 60 per cent LTV, but adds that advisers expect the best rates to apply to tighter LTV requirements.

Discussing the main competition Hollingworth suggests another Godiva deal where a flat arrangement fee is preferred. “This also offers a three- year fixed rate of 3.39 per cent with a £999 fee, the same freebies for valuation and legal work and a slightly more expansive maximum LTV of 65 per cent. The flat fee will prove to be better value than the percentage fee for many borrowers.”

BROKER RATINGS

Suitability to market: Good
Competitiveness of rate: Good
Flexibility: Average
Adviser remuneration: Good

Overall 7/10

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