Type: Tracker mortgage
Tracker term: Two years
Tracker rate: 0.13% below Bank of England base rate
Payable rate: 4.37%
Minimum loan: £6,000
Maximum loan: Up to 90% of valuation subject to a maximum loan of £500,000
Income multiples: Based on affordability
Conditions: free valuation subject to a £1,190 maximum, £250 cashback for home purchase, free legal work for remortgages
Arrangement fee: £498 for home purchase including first-time buyers, £597 for remortgages
Redemption fee: Calculation based on the amount repaid and length of tracker term, plus repayment of £250 cashback or maximum of £172 for remortgage legal work
Introducer’s fee: Refer to lender
Tel: 0870 600067
This mortgage tracks the Bank of England base rate for two years and is available for loans up to 90 per cent of valuation.
London & Country mortgage specialist David Hollingworth thinks this new tracker from Abbey is a very aggressively priced two-year deal at 4.37 per cent, which offers attractive incentives alongside the very attractive rate. “On purchase the client will receive a free valuation and a £250 cashback on completion, while those remortgaging are offered a free valuation and free legal work,” he says.
Hollingworth notes there are no early repayment charges beyond the two-year tracking period, “Abbey also backs the product up with flexible underwriting and good service,’ he says.
In Hollingworth’s view, there is not much to criticise about the deal as it offers a clean, sharp rate with good incentives. “ While it helps with a number of costs the £498 arrangement fee payable on purchases is hiked up to £597 for those remortgaging. Having said that, in today’s market neither fee is outrageously high,” he says.
Considering which deals could compete with this one Hollingworth says: “This is a hotly contested marketplace and there are a number of products in the mix. Direct Line’s is very keenly priced at 4.19 per cent and also offers free valuation and legal work for remortgage. However these incentives are repayable if the mortgage is redeemed at any point over the term of the deal and is only available on the internet.”
He adds that Portman offers a deal at 4.35 per cent but this is calculated on annual interest where Abbey is daily interest. Nationwide also has a very similar deal to Abbey. “In fact the rate is the same at 4.37 per cent but Abbey has priced its fee £1 below Nationwide’s,” says Hollingworth.
Suitability to market: Good
Competitiveness of rate: Good
Adviser remuneration: Good