Type: Tracker mortgage
Tracker term: Two years
Tracker rate: 0.26% below Bank of England base rate
Payable rate: 4.24%
Minimum loan: 25,001
Maximum loan: Up to 90% of valuation subject to a maximum of 500,000, up to 85% of valuation subject to a maximum of 1.7m, up to 75% of valuation subject to a maximum of 2m
Income multiples: Up to 3.25 times principal inoome plus second or 2.75 times joint
Conditions: Online applications only
Arrangement fee: 1% of the original loan
Redemption fee: 5% of the amount repaid in year 1, 4% in year 2
Introducers fee: 0.35% of original loan
Tel: 08707 590170
Pink Home Loans is offering a two-year tracker mortgage funded by BM Solutions which has a current payable rate of 4.24 per cent.
John Charcol senior technical manager Ray Boulger thinks this is very competitive for small mortgages. Because there is no minimum fee the 1per cent arrangement fee is below average for small mortgages and this, combined with the low rate, makes it good value up to about 50,000, h says.
Looking at the drawbacks of the mortgage Boulger feels it s not competitive when compared with BM Solutions’ generic 2 year tracker, which has a rate of Bank Base Rate – 0.75 per cent and a fee of 1,499, with other features such as LTV the same. The generic rate will save the borrower 0.98 per cent over the two years compared with this deal and for mortgages of at least 150,000 the fee on the generic product is lower as well. The larger the mortgage the less competitive this deal is, he says.
Boulger thinks competition will come from base rate trackers offered by BM Solutions, Abbey, Lambeth Building Society and Nottingham Building Society.
Suitability to market: Average
Competitiveness of mortgage rate: Average
Adviser remuneration Average