Type: Self-cert fixed rate mortgage
Fixed term: 5.49%
Fixed rate: Until February 2, 2009
Minimum loan: £25,000
Maximum loan: Up to 80% of valuation subject to a maximum loan of £500,000
Income multiples: Up to 3.75 times principal income main plus second o 3.25 times joint
Conditions: Free valuation, free mortgage payment protection insurance in first three months
Flexible features; Overpayments up to £5,000 a year, underpayments, payment holidays, lump sum withdrawals between £500 and £25,000, interest calculated daily
Arrangement fee: £545
Redemption fee: 4% of amount repaid in year one, 3% in year two
Introducer’s fee: Refer to lender
Tel: 0845 0554567
This self-cert deal from the Cheshire Building Society is fixed at 5.49 per cent until February 2, 2009.
John Charcol product specialist Ash Sharma observes that with self-cert products under constant review, Cheshire Building Society has introduced a new rate aimed at the self-employed market.
Providing a summary of the product details Sharma says: “This is a two-year fixed rate, set at 5.49 per cent until February 28, 2009. It has early repayment charges of 4 per cent in the first year from completion followed by 3 per cent until the end of the fixed rate period. A fee of £545 is applicable, of which £100 is payable on application,”
According to Sharma, the main benefit of this product for self-cert borrowers is its flexible features. “As with all Cheshire products, borrowers can benefit from overpayments, underpayments, payment holidays and borrowing back of overpaid funds.
“Most borrowers on self-cert products, particularly fixed rates, benefit from overpayments of up to 10 per cent a year. However, very few self-cert products have the full range of flexible features. As well as it’s flexibility, all borrowers benefit from a free valuation up to £750,000, says Sharma.
Turning to the potential drawbacks of this deal Sharma says: “It is only available up to 80 per cent of valuation, while most lenders will go to 85 or even 90 per cent. Another drawback is one that was mentioned earlier, in that it is only available to the self-employed who have been trading for a minimum of 12 months.
In Sharma’s view, the main products for competition are from Alliance & Leicester and Mortgage Express. The Alliance & Leicester deal is a 5.4 per cent two-year fix, with valuation refund for all and £250 cashback on remortgages. The Mortgage Express’ deal is fixed at 5.39 per cent until January 31, 2009 and Sharma selects this for its flexibility.
Suitability to market: Average
Competitiveness of rate: Average
Adviser remuneration: Average