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Defaqto on the Abbey For Intermediaries/Santander 3-Year Tracker

View of Defaqto insight analyst for banking Kevin Bray

Bray says: “The product is pitched in the highly competitive 75 per cent LTV bracket. The arrangement fee differs from other Abbey products by charging 1 per cent of the mortgage loan instead of a fixed price. This fee structure fills the gap that was left in the intermediary product range following the withdrawal of the Alliance & Leicester brand that is also owned by Santander. A mortgage account fee of £225 added at completion should also be considered, but it is not interest bearing during the mortgage term.

“Abbey attaches its usual features to this mortgage including the homebuyer solution package comprising of a free valuation and £250 contribution towards legal costs. A 10 per cent overpayment facility a year without penalty is also available.

“All purchasers have the option of a repayment or interest only mortgage. Abbey also continues to fast track applications that meet its criteria but advisers should be aware that Abbey could request income verification at any time in the future. Brokers must be able to provide suitable documentation otherwise the facility will be restricted.

“With the FSA’s mortgage market review consultation period drawing to a close, it appears unlikely that Abbey’s fast track facility will be allowed to remain. ‘There is more cause for optimism for interest-only mortgages, but they could be restricted to 75 per cent LTV and have tighter restrictions on suitable repayment vehicles.”

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