Type: Discounted-rate tracker mortgage
Discounted term: Until May 31, 2007
Payable rate: 4.75%
Tracker term: Lifetime of loan
Tracker rate: 1% above Bank of England base rate
Minimum loan: 25,000
Maximum loan: Up to 95% of valuation subject to a maximum of 350,000
Income multiples: Existing borrowers up to 3.75 times principal income or three times joint, new borrowers up to 95% of valuation up to 3.25 times principal income plus second or 2.6 times joint, up to 75% of valuation – up to 3.5 times principal income plus second or 2.75 times joint
Arrangement fee: 495 plus 50 application fee
Conditions: Capital repayments of up to 50% allowed without penalty within tracker term
Redemption fee: 3% of amount repaid if mortgage is redeemed or reduced to half the original amount
Introducers fee: 0.4% of original loan
Tel: 0845 230 9696
Ipswich Building Societys base rate tracker mortgage is available for loans up to 95 per cent of valuation up to a maximum of 350,000.
Highclere Financial Services partner Alan Lakey thinks this is a good solid offer which is likely to prove a winner. He says: “This is simple to understand and accessible up to 95 per cent of the property value. After the two years tracking, the loan reverts to the standard tracker rate of Bank base plus 1 per cent.”
Lakey likes the loans portability and daily calculation of interest. He feels the income multiples are reasonable and adds: “Unusually, Ipswich will include family tax credit within income.”
Lakey says that although there is an early redemption penalty of 3 per cent, up to 50 per cent of the borrowing can be repaid without penalty. He points out that the procuration fee of 0.4 per cent is available via the Norwich Union Mortgage Club and others.
Considering the less attractive features of the product Lakey says: “The arrangement fee is particularly high and may put off borrowers with smaller loan requirements.”
Scanning the market for possible competitors, Lakey says: “Portman and Abbey offer lower rates on their two-year trackers. However, Portman, with an annual interest calculation, may prove more expensive.” He concludes by saying the Saffron Walden Building Society also has an attractive annual calculation rate.
Suitability to market: Good
Competitiveness of mortgage rate: Good
Adviser remuneration: Average