Type: Offset fixed-rate mortgage
Fixed term: Until September 30, 2017
Fixed rate: 5.99%
Minimum loan: £25,001
Maximum loan: Up to 95% of valuation subject to a maximum of £250,000, up to 90% of valuation subject to a maximum of £400,000, up to 80% of valuation subject to a maximum of £750,000, up to 75% of valuation subject to a maximum of £1m
Income multiples: Based on affordability
Conditions: Capital repayments of up to 10% a year allowed without penalty, one free mortgage valuation subject to a £650 maximum, free legal fees for remortgages if in-house solicitors used or £200 contribution towards legal costs, mortgage not available for properties in Northern Ireland and Scotland
Flexible features: Overpayments, payment holidays of up to three months a year, interest calculated daily, offset facility
Arrangement fee: £800 plus £199 booking fee
Redemption fee: 4% of the amount repaid in the first five years
Introducer’s fee: Subject to negotiation
Tel: 0845 7573612
This 10-year fixed rate at 5.99 per cent is available up to 95 per cent of valuation and has flexible features, including an offset facility.
London & Country mortgage specialist James Cotton says: “Coventry’s deal is fixed at 5.99 per cent until 30 September 2017 and is available up to 95 per cent loan to value. It carries a £999 arrangement fee, offers a free valuation and legal work for remortgages is free.”
In Cotton’s view this deal looks like a fairly well priced 10-year fix, but there are two additional features that make it stand out. “The first is its offset facility with flexible feature and the second is the fact that it has early redemption charges for only five years rather than 10. These features open the product up to a lot more people than a standard 10-year fix,” he says.
Looking at the potential drawbacks Cotton says: “There are cheaper deals on longer-term fixes, so it is a question of whether the borrower will get enough benefit out of the offset facility and the flexible features.”
For those who do not need or want an offset facility, Cotton suggests alternative deals including Newcastle’s 5-year fix at 5.82 per cent with a £499 fee and Norwich & Peterborough’s 10-year fix at 5.78 per cent with a £495 fee.
“For those who do want those features, First Direct also has a 10-year fix, but the rate is some way off at 6.49 per cent. It has a £794 fee and early redemption charges for 10 years,” he says.
For those who definitely do want an offset, but are less concerned with fixing their rate, Cotton says Hinckley & Rugby has a good lifetime offset tracker at 0.20 per cent above base, capped at 6.19 per cent for two years.
Cotton concludes: “You could make the assumption that the sort of borrower who has the finances to benefit from the offset facility, may not need the security of a long-term fix and may be better suited to a variable rate. However, this does not take away from the fact that this is a well-priced deal.”
Suitability to market: Average
Competitiveness of rate: Good
Adviser remuneration: Good