Type: Fixed rate mortgage
Fixed term: Until August 31, 2013
Fixed rate: 7.14%
Minimum loan: £25,000
Maximum loan: Up to 90% of valuation subject to a maximum of £500,000, up to 85% 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
Arrangement fee: £599
Redemption fee: 3% of the amount repaid in the first five years
Introducer’s fee: Subject to negotiation
Tel: 0845 300 2563
This Alliance & Leicester product is fixed at 7.14 per cent for five years.
Unleash Advice Partnership IFA Adrian Kidd says: “This product is totally uncompetitive. I find it very hard to find anything positive about it apart from reasonable arrangement fee – although at that rate it should charge nothing.”
He complains that there is nothing unusual or interesting about this deal and highlights the rate as its worst feature.
Discussing potential competitors, Kidd says there are too many to mention them all, but he highlights some that immediately spring to mind. “Nationwide has a five-year fix at 6.3 per cent with a £599 arrangement fee. However, it looks as if you have to pay valuation/solicitor costs, so borrowers should maybe budget another £1,000 on top of that. Even Northern Rock kills the A&L rate by 45 basis points. “
Woolwich, Halifax and Abbey are also considered worthy competition as they all easily beat the A&L deal on rate.
Summing up, Kidd says: “I do not see the point of releasing something so uncompetitive to intermediaries as they are not going to recommend it.
Suitability to market: Poor
Competitiveness of rate: Poor
Adviser remuneration: Average