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Mercantile takes the long view

Mercantile Building Society is looking to the long-term mortgage market with the introduction of its lifetime discount mortgage.

The mortgage has a discount of 1.1 per cent for the term of the mortgage, giving it a payable rate of 5.54 per cent for loans of up to 80 per cent of the value of the property. For properties outside the northeast of England then the maximum loan amount available drops to 75 per cent.

Mercantile is also lending a helping hand to borrowers, with a contribution of up to £200 towards basic valuation costs and free unemployment insurance for the first year. There is no redemption penalty if the borrower pays back the mortgage early on in the life of the mortgage.

This is a niche area of the market, as according to Moneyfacts there are only 26 mortgages with a lifetime discount on the market, provided by 14 companies. Lower rate mortgages are available, with the lowest coming from Marsden Building Society. This has a 3 per cent discount for the first year followed by a 0.5 per cent discount for the remaining term of the mortgage, giving it a payable rate of 3.3 per cent for loans of up to 90 per cent of valuation.

The Marsden mortgage offers free basic valuation fees if a Marsden solicitor is used, along with free legal fees for people looking to remortgage. It also offers free accident, sickness and unemployment cover for the first three months of the loan. However, unlike the Mercantile product there is an arrangement fee of £295 and redemption penalties of 3 per cent of the advance in the first three years, reducing to 2 per cent in year four and 1 per cent in year five.


Flight hits out at &#39anti-IFA&#39 stance in review

Shadow Economic Secretary Howard Flight says Ron Sandler&#39s review of the retail savings market proves the Establishment is anti-IFA. Speaking at last week&#39s Institute of Financial Planning Conference in Coventry, Flight slammed the review, saying: “I was shocked the Sandler consultation document contained outrageous Establishment anti-IFA bias.” He accused the review of being “shallow in […]

Linked bonds spark fears of misselling

IFAs fear that the recent stockmarket slump could mean many high-income and stockmarket-linked bonds fail to reach their investment targets, leaving policyholders out of pocket and triggering claims of misselling. The fall in stockmarket indices to which many of the bonds are linked could mean that some policyholders lose their entire investment, as many bonds […]

Outside edge

As I finish the final draft of my “Dear Ron” letter it becomes clear that the status quo is no longer an option. Scottish Amicable abandoning commission on regular-premium business simply acknowledges the fact that a far more commercial world is well on the way for those of us who wish to remain as IFAs. […]

Widows sets its focus on electronic applications

Scottish Widows has signed transaction software provider Focus Solutions to process new business applications electronically. Widows will use the Focus goal:technology system for processing and transacting its life and pensions products. The software allows insurance companies to create electronic application forms which can be used across a variety of distribution channels. The provider will use […]

Cricket - thumbnail

England vs Australia: pensions

Well, the cricket season is here, and England and Australia are stepping up to the wicket. Although we compete with each other in the sporting world, when it comes to pensions, Australia’s pension programme is held up as a model for our auto-enrolment initiative. Auto-enrolment was introduced because people weren’t saving enough into their pensions, and it is still early days but signs are positive. However, in Australia, saving into a pension is compulsory, and in fact employers are the ones who have to pay in. Employees in Australia can make additional contributions into their pensions, but they don’t have to. Should the onus be on the employer or employee to save? Well in the UK we think it’s both, but to get ‘adequate’ savings for retirement it’s the employee who has to pay more in.


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