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A welcome 10-year fix from Accord

Accord Mortgages – 10-Year Fixed Rate Offset

Type: Fixed-rate offset mortgage

Fixed term: Until June 30, 2020

Fixed rate: 5.54%

Minimum loan: £30,000

Maximum loan: Up to 75% of valuation subject to a maximum of £750,000

Income multiples: Based on affordability

Flexible features: Unlimited overpayments, offset facility

Conditions: Mortgage available through selected distribution partners

Arrangement fee: £900 completion fee plus £95 booking fee

Redemption fee: 5% of the amount repaid in the first five years if mortgage is repaid in full, 4% in years six to eight, 2% in years nine and 10

Introducer’s fee: Refer to lender

Tel:  0845 1200882

This 10-year fixed rate from Accord Mortgages, the intermediary arm of Yorkshire Building Society, is available at 5.54 per cent for mortgages up to 75 per cent of valuation to a £750,000 maximum.

Putting this deal in to its market context, London & Country  head of communications David Hollingworth says: “The 10-year fixed rate market is much smaller than it used to be with only a handful of lenders now offering products, so any new offering should be welcomed.  Accord itself has a number of options available but this one stands out as something a little different due to the ability to offset savings.”

Hollingworth feels this adds more flexibility to a long-term product that is often very inflexible. He says: “This additional functionality could help the product adapt with lifestyle changes over the 10 years.”

Discussing the potential drawbacks of the deal Hollingworth says:”A fixed rate over 10 years offers security over the long term, but these deals also tend to lock the borrower in with early repayment charges.  This is fine for those borrowers that are sure they will have no need to alter their mortgage requirement over the years.  However, many borrowers are hesitant to lock in for such a long period.”

Identifying the main competition Hollingworth says:”Borrowers set on a 10-year deal but not swayed by the ability to offset will opt for some of the lower rated deals.” He points out that Accord itself offers a lower rate of 5.24 per cent and Yorkshire Building Society has recently launched a deal at 4.99 per cent.

Summing up Hollingworth says: “A 10-year fixed rate is not likely to appeal to the masses due to the lock-in period and cheaper rates available on short to medium-term fixed deals.  However, offsetting sits very well with a longer term deal and so this does offer a bit more than traditional, bog standard rates.”

BROKER RATINGS

 Suitability to market:  Average

Competitiveness of rate: Good

Flexibility: Good

Adviser remuneration: Good

Overall 7/10

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