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Coventry caps it up

COVENTRY BUILDING SOCIETY

Flexx Capped Mortgage

Type:
Flexible capped-rate tracker mortgage

Tracker rate:
0.85% above Bank of England base rate

Payable rate:
4.85%

Capped term:
Until December 31, 2009

Capped rate:
5.99%

Minimum loan:
£1

Maximum loan:
Up to 95% of valuation subject to a maximum of £500,000

Income multiples:
Dependent on loan to valuation and salary band

Flexible features:
Overpayments, payment holidays up to three months a year,
interest calculated daily

Arrangement fee:
£125

Redemption fee:
None

Introducer&#39s fee:
Subject to negotiation

Tel: 02476 839230

Coventry Building Society&#39s Flexx capped mortgage is a flexible capped-rate tracker mortgage that is capped at 5.99% until December 31, 2009.

Aptitude Financial Planning principal Roy Rutter says: “Coventry Building Society is fairly committed to the mutual status and has always been competitive on the savings and lending side of the book. Name awareness among the public and IFAs is fair.”

Rutter believes Coventry&#39s capped-rate product will appeal to borrowers. He says: “It is the right time for a reasonably priced capped-rate deal with some uncertainty over the direction of interest rates. The particular pluses are no early redemption penalties, fee-free remortgaging, no valuation fees, daily interest and a facility to underpay or overpay.”

After considering the negative aspects of the product Rutter says: “The capped rate of 5.99 per cent is a fraction higher than some mortgages but not sufficiently to be uncompetitive. Coventry quotes both a booking fee and an arrangement fee which is not a good marketing ploy. It will be better off quoting one fee, by whatever name, and keeping it under £300.”.

Looking at other deals that could compete with the Coventry mortgage Rutter says: “Abbey and Cheltenham & Gloucester have more competitive capped rates but these have early redemption penalties. The capped-rate market seems to have contracted in size of late so I do not see too much competition.”

BROKER RATINGS:

Suitability to market: Good
Flexibility: Good
Competitiveness of mortgage rate: Average
Adviser remuneration: Average

Overall 8/10

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