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First time choice fixed from Coventry

Coventry Building Society

First Time Buyer 5.99% Five Year Fixed

Type: Fixed-rate mortgage

Fixed term: Until June 30, 2014

Fixed rate: 5.99%

Conditions: First-time buyers only

Minimum loan: £1,000

Maximum loan: Up to 85% of valuation subject to a maximum of £250,000

Income multiples: Based on affordability

Conditions: Free valuation up to £640

Arrangement fee: £500 plus £199 booking fee

Redemption fee: 4% of amount repaid in the first five years

Introducer¹s fee: Subject to negotiation

Tel: 0845 7573612

This 5.99 per cent cent five-year fixed-rate mortgage is available to first-time buyers only for loans up to 85 per cent of valuation up to £250,000.

Looking at how this deal will fit into the market, London & Country Mortgages technical manager Richard Morea says: “With the outlook remaining unclear, more borrowers are opting for longer term fixes, so this first time buyer product is likely to be popular with both brokers and borrowers.”

He notes that as the market remains depressed, sellers are keener than ever to hang onto first-time buyers, but with down valuations and other issues resulting in lost sales, having only £199 fee payable on application and a free valuation reduces the borrowers exposure.

“For brokers the main difficulty is still the volume and pricing of direct only products and this new Coventry product helps to close the gap. Having a 15 per cent deposit is difficult but necessary for first time buyers so it is encouraging to see Coventry, among others, introducing more competitive products at higher LTVs.”

He adds that the rate, at 5.99 per cent, matches anything available to brokers at 85 per cent LTV, but the lower fee and free valuation make it a hard to beat combination.

Focusing on the less attractive features of the product Morea says: “There is a penalty free overpayment facility of 5 per cent a year, which is half that of most schemes, but it should still be sufficient for the majority of first time buyers. “ He also thinks the maximum loan of £250,000 for first time buyers may be a little restrictive.

Discussing the main competition Morea feels direct products still have the edge as they are available from 5.49 per cent at 85 per cent LTV. “However the Coventry deal provides brokers with the best option for first time buyers at this LTV, with its combination of rate, and reduced fees,” he says.


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

Overall 8/10



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