Type: Fixed-rate mortgage
Fixed term: Two years
Fixed rate: 4.39%
Minimum loan: 25,001
Maximum loan: Up to 60 per cent of valuation subject to a maximum of 500,000
Income multiples: Based on affordability and credit score
Arrangement fee: 399
Redemption fee: 70 days’ interest until February 2, 2008
Introducers fee: Refer to lender
Tel: 0870 6000 367
Abbey has brought out a two-year fixed rate mortgage at 4.39 per cent for loans up to 60 per cent of valuation.
Park Row Independent Mortgages managing director Kevin Paterson notes that Abbey has been struggling with the Santander takeover for most of this year which has resulted in severe service issues.
“For a lender in turmoil the Abbey is obviously seeking to distract it’s current shortcomings with some eye-catching deals. For those advisers looking no further than an eye-catching rate, this is ideal. But when you scratch the surface though you are likely to be disappointed,” he says.
Patersons main concern is the maximum loan to valuation of 60 per cent, which he views as very restrictive, especially given the suppressed nature of property prices in the last 12-18 months which has, in many cases, seen valuations dropping. He also dislikes the hefty fees and the potential for a five-month overhang on the early redemption penalty. This occurs where applications are made now, while early redemption charges are payable until February 2006.
In conclusion he feels that most of the current sub-4.8 per cent fixed rates available on the market will compete with this deal.
Suitability to market: Poor
Competitiveness of mortgage rate: Good
Adviser remuneration: Average