Type: Tracker mortgage
Tracker term: Until March 31, 2012
Tracker rate: 2.19% above the Bank of England base rate
Payable rate: 2.69%
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 £640, free legal fees or £200 contribution towards legal costs
Arrangement fee: £800 plus £199 booking fee
Redemption fee: 4% of the amount repaid in the first two years of the term
Introducer’s fee: Subject to negotiation
Tel: 0845 757 3612
This mortgage tracks at 2.19 per cent above the Bank of England base rate until March 31, 2012.
London & Country Mortgages technical manager Richard Morea says tracker deals have increased in popularity as borrowers become more comfortable with interest rate forecasts.
“This Coventry deal sits well among the market leaders. It is available up to 65 per cent of valuation for both purchases and remortgages, with a free valuation and free legal work for remortgages,” he says.
Morea notes the arrangement fee totals £999, including £199 payable on application and £800 on completion where it can be added to the loan.
“Coventry usually provides a good service and a safe home for applications, but will need a few competitors to withdraw their products before they see any real volume,” he says.
Turning to the less attractive features, Morea says: “Coventry joins a host of lenders offering + 2.19 per cent two-year trackers, but it sits a little off the pace. Many of the lower rates have higher fees, while others will be more competitive on rate, fee and loan to value,” he says.
Overpayments of up to 5 per cent a year without penalty during the tracker period are seen by Morea as below the market standard, but typical for Coventry.
Discussing the competition, Morea says: “Borrowers with bigger mortgages may be better off with the Accord +1.89 per cent deal, which carries a £1,995 fee. Those with less equity could opt for the Mansfield deal at +1.99 per cent, which is available to 75 per cent of valuation. Purchase customers with a small mortgage should consider Alliance & Leicester, which offers the same tracking margin as Coventry, but with a £495 fee.”
Suitability to market: Good
Competitiveness of rate: Good
Adviser remuneration: Average