Type: Fixed-rate mortgage
Fixed term: Unti June 2, 2011
Fixed rate: 3.89%
Minimum loan: £6,000
Maximum loan: Up to 60% of valuation subject to a maximum of £1m
Income multiples: Based on affordability
Conditions: Free valuation up to £1,190, £250 cashback
Arrangement fee: £995
Redemption fee: 3% of mortgage balance plus repayment of cashback
Introducer’s fee: Refer to lender
This two-year fixed-rate mortgage from Abbey for Intermediaries is available for loans up to 60 per cent of valuaiton up to £1m.
Looking at how this product could be useful for IFAs and their clients, Adrian Kidd says: “It is just another offering that is sitting in with a lot of others. I am not too excited about this, although you do get £250 cashback which means it may steal a bit of business from other lenders. “ He feels that the negotiable introducer’s fee is normal.
Turning to the negative aspects of the deal, Kidd says: “A two-year fixed rate is just dull. I would much rather see a lender come out with some aggressive five year fixes. I am sure that would generate some flows with rates below 4 per cent.”
He says he would still be inclined to recommend tracker mortgages rather than a two-year fixed rate, as he sees the market staying at its current low level for some time, possibly three years.
Scanning the market for potential competitors Kidd says: “All big players such as Halifax, Accord, RBS and Nationwide all have same rates but Abbey and Hailfax stand out.
Suitability to market: Average
Competitiveness of rate: Average
Adviser remuneration: Good