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Defaqto on Godiva Mortgages’ Residential 2.99% 3-Year Fixed

View of Defaqto insight analyst for banking Kevin Bray

Bray says: “Godiva is expanding its product range to intermediaries by offering prime residential rates. True to its word, it offers the same interest rate regardless of whether a customer chooses the intermediary or direct route to obtain their mortgage.

“This product is available to homebuyers and those looking to re-mortgage but a deposit or equity of at least 40 per cent must be provided. Godiva offers customers the opportunity to use its re-mortgage transfer service which comprises of a free valuation and free legal costs in most cases. The biggest downside of the product is the sizeable arrangement fee which is 1.5 per cent of the mortgage advance , which equates to £2,250 for a typical £150,000 loan. There is also a requirement to pay a non-refundable booking fee of £199 to secure the product.

“An overpayment facility is available, which is not particularly generous, only allowing up to 5 per cent of the capital a year to be repaid without penalty, Payment holidays up to three months each year and a privilege rate for customers who remain with Godiva on its standard variable rate.

“Overall, the product will attract attention given its very low interest rate but many people will be put off by the very high arrangement fee. There may be a number of customers who are currently on a standard variable rate of 4.5 per cent or more that will see this as the right time to re-mortgage to secure a low fixed-rate deal.”

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