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A nice package from Abbey For Intermediaries

Abbey For Intermediaries – Loyal Mover 2-Year Tracker

Type: Tracker mortgage for existing Abbey mortgage clients who are moving home

Tracker term: Two years

Tracker rate: 2.49% above the Bank of England base rate

Payable rate: 2.99%

Minimum loan: £6,000

Maximum loan: Up to 75% of valuation subject to a maximum of £550,000

Income multiples: Based on affordability

Conditions: Free valuation on properties valued up to £2.5m, £250 cashback

Arrangement fee: None

Redemption fee: 2% of the amount repaid plus repayment of cashback

Introducer’s fee: Refer to lender

Contact: www.abbeyforintermediaries.com

This two-year tracker mortgage differs from many other products in that it is available only to people with existing Abbey mortgages that are moving home.

Looking at how the product could be good for IFAs and their clients, London & Country Mortgages head of communications David Hollingworth says: “This is a good idea from Abbey for Intermediaries in providing a broker product specifically aimed at offering a good deal for existing Abbey borrowers.”

He thinks the initial rate on the product is reasonable for a two-year tracker with a loan to valuation of up to 75 per cent. He adds that it looks even better when considered alongside the fact that it is fee-free.  “There is no booking fee and the homebuyer solution benefits package provides a free valuation and £250 cashback.  That all adds up to a nice package for Abbey customers looking to move house.”

Highlighting the less attractive features of the deal Hollingworth says: “It is quite hard to find anything to really dislike about this product.  If you were to be picky then there are keener rates at this LTV, but as a fee-free deal this is a good overall package.  Of course its use is limited, as by definition it is only open to existing Abbey borrowers moving house.”

Discussing which products could compete with this, Hollingworth reiterates his comment that borrowers prioritising a low pay rate will find that there are keener tracker rates available.  “There are products offering two-year tracker rates at or around 2 per cent above the base rate, but they will carry bigger arrangement fees and not offer the incentives of free valuation and cashback.”

As an example he says Accord has an excellent tracker at 1.99 per cent above the base rate, which means it is 0.5 per cent cheaper than the Abbey deal. “However the arrangement fee on the Accord mortgage is £1,995, so the set-up costs will be much higher,” he says.

BROKER RATINGS

 Suitability to market: Good

Competitiveness of rate: Good

Flexibility: Average

Adviser remuneration: Good

 Overall 8/10

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