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Mortgage Next targets niche


BM Solutions Self-Certification Tracker Discount

Type: Discounted-rate self-cert tracker remortgage product

Discounted term: Three years

Discount: 0.9%

Tracker term: Life of loan

Tracker rate: Bank of England base rate plus 0.85% in first three
years, Bank of England base rate plus 1.75% thereafter

Payable rate: 4.6%

Minimum loan: £25,001

Maximum loan: Up to 85% of valuation subject to a maximum of
£350,000, up to 80% of valuation subject to a maximum of £500,000,
up to 75% of valuation subject to a maximum of £1m
Income multiples: Up to 3.25 times principal income plus second or
2.75 times joint

Conditions: Free valuation of up to £460, free legal fees

Arrangement fee: £349

Redemption fee: 5% of amount repaid in year 1, 4% in year two, 3%
in year three

Introducer&#39s fee: 0.5% subject to £200 minimum and £5,000

Tel: 01883 333100

The BM Solutions self-certification tracker discount mortgage from
Mortgage Next is a tracker mortgage that offers a three-year discount,
with early redemption fees payable during the discount period.
Aptitude Financial Planning principal Roy Rutter thinks this product is
positioned as a niche product but he is not sure about the appeal of
lifetime trackers.

In Rutter&#39s view, the BM Solutions name is getting known in its own
right as well as being part of the Halifax. He says: “I am personally
not a fan of Halifax. I think the idea of a fixed premium on the bank
base rate for life, rather than a long-term fixed rate, is not going to
look attractive for more than a few years. If interest rates remain low,
the hike at the end of tear three from 0.9 per cent below the base rate
to 1.75 per cent above the base rate is going to be expensive.”

However, on the positive side, he thinks the maximum loan to
valuation of 85 per cent is helpful. He says: “There seems to be a
ready market for self-cert mortgages and this product, which is for
remortgage only, fits in quite well. Although available only through
Mortgage Next, IFAs can deal with the lender direct and procuration
fees from BM Solutions are usually competitive.”

He suggests Northern Rock, Royal Bank of Scotland and sector
specialists such as GMAC will provide the main competition and
concludes: “It is sometimes forgotten that, particularly in a
remortgage situation, with a clean payment record mainstream
lenders such as Cheltenham & Gloucester can be more competitive.”


Suitability to market: Poor
Competitiveness of mortgage rate: Average
Adviser remuneration: Good
Overall 6/10


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