View more on these topics

Coventry adds to offset range

Coventry Intermediaries – Offset 3.49% Flexx for Term

Type: Variable rate offset mortgage

Mortgage term: Life of loan

Payable rate: 3.49%

Minimum loan: £1,000

Maximum loan: Up to 65% of valuation subject to a maximum of £1m

Income multiples: Based on affordability

Conditions: One free valuation up to £670, remortgage transfer service, available for properties in England, Wales, mainland Scotland and Northern Ireland.

Flexible features: Offset facility, unlimited overpayments, payment holidays of up to three months a year after six months, interest calculated daily

Arrangement fee: £1,800 plus £199 booking fee

Redemption fee: None

Introducer’s fee: Subject to negotiation

Tel: 0845 757 3612

This variable rate mortgage is one of two new deals that Coventry Intermediaries has added to its offset range.  It has a current pay rate of 3.49 per cent and has a £1,800 arrangement fee plus a £199 booking fee. The other new deal is similar but has a rate of 3.69 per cent and a lower arrangement fee of £1,300 plus a £199 booking fee.

Discussing the useful features of the offset 3.49% Flexx for term, Paul White, consultant at Belgravia Insurance Consultants, says: “The flat fee feature, which can be added to the loan, suits bigger loans on a low loan-to-valuation. With only £199 to pay upfront, the clients’ mortgage can easily be got under way.”

White feels the free valuation up to £670 should cover most circumstances. “The remortgage transfer service is extremely efficient and so remarked upon by clients. The absence of an early repayment charge means that the borrower is free to remortgage at any stage,” he says.

White adds that the ability to take payment holidays is welcome, but he suspects that take-up will be low at 65 per cent of valuation.

This brings White on to the drawbacks of the deal. “At 65 per cent, the LTV is quite low, which means that it competes with a lot of other mortgage products if the offset option is not required.” He adds that annual bonuses are excluded from the income multiple guide of four times joint income.

Identifying the main competition that the Coventry could face, White says: “The Melton Mowbray offers a 3.35 per cent lifetime discount variable offset and is marginally cheaper on rate. This lender also charges no arrangement fee and is very much cheaper on fees than the Coventry product.”

He adds that the Melton Mowbray deal has a hefty early repayment charge of 3.25 per cent of the advance plus £190, but only for the first year. This deal also offers free legal fees.

“Solent Mortgage Services also packages the same product for the Melton Mowbray with a slightly higher fee structure. Otherwise, there are no other competitors in the lifetime offset field at the mid-3 per cent mark,” says White.

Summing up, White says: “Coventry has been conspicuous in still offering mortgages throughout the credit crunch, due to their funds for mortgages being raised through deposits, rather than the money market.”

BROKER RATINGS

Suitability to market: Good

Competitiveness of rate: Good

Flexibility: Average

Adviser remuneration: Average

Overall 8/10

Recommended

Axa Wealth development role

Axa Wealth has appointed David Stratton to the newly created role of head of business development. Stratton was regional sales manager for the Midlands. The new role looks to build distribution relationship partners. The appointment comes as part of a restructure announced in January, which saw Axa segment its IFA clients, putting 50 jobs at […]

1

Hargreaves Lansdown assets jump 11% to £26bn

Hargreaves Lansdown has seen its assets under administration jump 11 per cent in the first quarter of 2012 to stand at £26bn. The figure is up on the £23.4bn recorded at December 31, 2011. Assets on the group’s Vantage platform also rose 11 per cent from £21.9bn to £24.4bn, Hargreaves Lansdown says the increase in […]

Advisers see late surge in Isa sales

Investment advisers reported resilient Isa sales in the weeks before the end of the tax year deadline last Thursday. Advisers had been hoping for a busy month in the lead-up to April 5, despite figures from the Investment Management Association showing Isas suffered net outflows of £243m in January and February 2012 alone. Bestinvest says […]

Principality cuts back interest-only but keeps 85% LTV deals

Principality Building Society is restricting its interest-only offering to just three products but has retained its 85 per cent loan-to-value ratio mortgage. Interest-only was previously available on Principality’s entire range but it will now be restricted to the society’s 85 per cent, 75 per cent and 50 per cent LTV deals. Its 85 per cent […]

State of the markets: UK equity income

Artemis Income Fund manager Nick Shenton discusses the state of the UK equity income market with journalist Alexis Xydias. With the first three months of 2015 showing strong returns for both the Artemis Income Fund and UK markets generally, Nick Shenton discusses the fund’s top contributors – including overseas holdings Novartis and Bayer – and […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment