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Early bird Nationwide catches long term market

Nationwide

10-Year Fixed Rate

Type: Fixed-rate mortgage with flexible features

Fixed term: 10 years

Fixed rate: Up to 95% of valuation 5.69%, up to 90% of valuation 5.19%

Minimum loan: 1

Maximum loan: Up to 95% of valuation subject to a maximum of 200,000, up to 90% of valuation subject to a maximum of 300,000, up to 85% of valuation subject to a maximum of 400,000, up to 80% of valuation subject to a maximum of 700,000, up to 75% of valuation subject to a maximum of 1m, up to 60% of valuation subject to no maximum

Income multiples: Based on affordability calculation and credit score

Flexible features: Overpayments of 500 a month, underpayments, lump sum withdrawals, interest calculated daily

Arrangement fee: 389 plus 95 administration fee for remortgages

Redemption fee: 5% of mortgage balance in year one, 4.5% in year two, 4% in year three, 3.5% in year four, 3% in year five, 2.5% in year six, 2% in year seven, 1.5% in year eight, 1% in year nine, 0.5% in year 10

Introducers fee: Subject to negotiation

Tel: 0800 302010

Aptitude Financial Planning principal Roy Rutter believes Nationwides much respected name and the fact it is still a building society may aid demand for this product. However, he does not think the UK market is ready yet, at least not en masse, for long-term fixes.

In Rutters view, the headline rates on this mortgage are good for a 10-year deal. He says: “Nationwide has always been competitive with its standard variable rate. This rate does slightly undercut the relatively few competitors in the 10-year fix market and the early redemption penalties are better than I expected.”

Rutter is also pleased to see that the overpayment without penalty is allowed but complains that the loan to valuation limits are lower than many competitors. Considering other potential drawbacks, he says: “Those looking to remortgage may be put off by the lack of any incentive such as free valuation and by the additional administration fee of 95.”

Rutter cites Northern Rock, the Marsden Building Society and Cheltenham & Gloucester as possible competitors to this deal. He concludes: “Is now the right time for a 10-year fix? I very much doubt it.”

BROKER RATINGS

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

Overall 5/10

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