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Coventry makes it better

COVENTRY BUILDING SOCIETY

Altogether Better Offset Mortgage

Type:
Discounted-rate offset mortgage

Discounted term:
Until March 31, 2009

Discount:
1.44%

Payable rate:
4.6%

Minimum loan:
£1

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

Income multiples:
Based on loan to valuation and salary band

Redemption fee:
None

Arrangement fee:
£199

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

Commission:
Subject to negotiation

Tel: 0845 7767825

Coventry Building Society&#39s altogether better offset mortgage is a discounted-rate offset mortgage enabling borrowers to reduce the amount they owe on their mortgage by putting money into the offset savings account. This account calculates interest at the same rate as the mortgage.

Charcol senior technical adviser Ray Boulger thinks the mortgage fits into the offset market very well. He says: “For a lender who wants to offer an offset mortgage without a current account what Coventry has done is very clever &#45 linking the mortgage to a savings account which offers all the current account features most people need &#45 except a cheque book.”

Boulger regards the discount as respectable and feels the mortgage offers good incentives to borrowers such as free valuation and free legals on remortgages. He points out that the arrangement fee of £199, which Coventry calls a booking fee, is below average, but payable on application and is non refundable.

Boulger likes the fact that the mortgage has no early repayment charges and is available up to 95 per cent of valuation. He says: “Although there is no option to link a current account to the mortgage, the features available on the linked savings account go well beyond what is normally available with a savings account. This savings account includes current account features such as an automatic teller machine card that allows withdrawals of up to £500 per day and a facility to set up direct debits and standing orders.”

However, Boulger complains that the discount only applies until March 31, 2009, whereas other lenders offer lifetime tracker rates, including some slightly below the rate on this product. He says: “During the five years of this deal, the bank base rate will probably start falling again and there is no certainty on a deal linked to a lender&#39s SVR that borrowers will see the full benefit of this.”

BROKER RATINGS:

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

Overall 9/10

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