Type: Offset discounted-rate tracker mortgage for people with high annual bonuses
Discounted term: Until June 30, 2007
Payable rate: 4.24%
Tracker term: life of loan
Tracker rate: 0.49% above the Bank of England base rate
Minimum loan: £500,000
Maximum loan: Up to 85 per cent of valuation subject to a maximum of £2m
Income multiples: Based on affordability
Flexible features: Overpayments, underpayments, payment holidays, lump sum withdrawals, interest calculated daily, offset facility
Arrangement fee: £1,499
Redemption fee: None
Introducer’s fee: Refer to lender
Tel: 0845 070 1567
This offset Woolwich deal is aimed at people who work in the City and receive high annual bonuses.
Highclere Financial Services partner Alan Lakey likes this product but has reservations about the lender. If senior management could excise the proliferation of administrative failings, this product would be a surefire winner,” he says.
Lakey believes the product is well reasoned and focused in aiming at a well-heeled niche market. “The majority of high net worth individuals will use advisers so this initiative may prove worthwhile,” he says.
Lakey points out that the deal is a no penalty offset scheme where the initial discounted rate is 4.24 per cent set a 0.51 per cent below bank base until July 2007. It then moves to bank base plus 0.49 per cent.
“This is a market leading product, albeit with a £1,499 application fee. The minimum loan of £500,000 reflects the target market and the loan to value of 85 per cent of valuation is acceptable. This product is also available using the free valuation and legal costs remortgage scheme.”
Lakey says he cannot fault this product and were it available from any other lender, he would be looking to make use of it. “However, past experience tells me that the Woolwich fails abysmally to provide a worthwhile level of support and administrative capability. This failure has existed for many years and I fear it is endemic to the company.”
He believes competition will come from The One Account and Standard Life Bank, which are proven in the offset concept and have also mastered customer care values.
Suitability to market: Good
Competitiveness of rate: Good
Adviser remuneration: Average