Type: Fixed-rate remortgage
Fixed term: Until February 28, 2013
Fixed rate: 3.48%
Minimum loan: £50,000
Maximum loan: Up to 75% of valuation subject to a maximum of £1m
Income multiples: Based on affordability
Arrangement fee: None
Redemption fee: 3% of the amount repaid in the first two years
Introducer’s fee: Refer to lender
Tel: 0845 070 1567
Putting this mortgage in to its market context, London & Country Mortgages head of communications David Hollingworth says: “This product is part of an expansion of the successful Great Escape concept which offers remortgage borrowers the option of switching their deal without facing heavy set up costs.
“Much of the appeal of the product will stem from the lack of any arrangement fee coupled with the remortgage package of free valuation and free legal work. The icing on the cake comes in the shape of a £300 cashback, which should neutralise any exit fee that may be imposed by the existing lender.”
Hollingworth feels that the addition of fixed rates to the Great Escape range and an increase in loan-to valuation to 75 per cent with this product is very welcome and should build on the popular Great Escape tracker product.
Turning to the potential drawbacks Hollingworth says: “There is not really a lot to dislike about the deal. There are cheaper rates available but very little with this kind of fee incentive that will be of particular use to those with more modest mortgages that want to avoid heavy switching costs.
“Hopefully there may be further expansion of the range and a longer term fix could complement these new rates nicely.”
Discussing the main competition, Hollingworth notes there is little that will offer exactly the same kind of package. But he points out RBS has a direct deal at 2.75 per cent with no fee, remortgage package and a £250 cashback. “However this product is only available to a maximum LTV of 50 per cent rather than the more generous Woolwich limit of 75 per cent,” he says.
For bigger loans, Hollingworth thinks the attraction of lower interest rates that can be half a percent lower may outweigh the lack of fees that the Great Escape products offer.
Summing up, Hollingworth says: “With more activity on the remortgage front, the Great Escape deals are a welcome addition to Woolwich’s portfolio. There is the additional comfort that the products are priced on par with anything available in a branch. “
Suitability to market: Good
Competitiveness of rate: Good
Adviser remuneration: Good