Type: Fixed-rate mortgage
Fixed term: Two years
Minimum loan: No minimum
Maximum Loan: Up to 50% of valuation subject to a maximum of £1m
Income multiples: Based on affordability
Conditions: Capital repayments of up to £500 a month allowed without penalty ion the fixed rate period, free valuation and free legal fees for remortgages where in-house solicitor is used
Arrangement fee: £400 for purchases, £900 for remortgages plus £99 booking fee
Redemption fee: 3% of the amount repaid in the first two years
Introducer’s fee: Refer to lender
Nationwide’s lowest two-year fixed rate mortgage is available at 2.99 per cent for loans up to 50 per cent of valuation.
London & Country head of communications David Hollingworth says: There’s a strong argument for borrowers to consider taking a fix for longer than two years to protect against rates when they really start to rise. However, the shorter term fixed-rate market remains popular and is highly competitive.
“This deal is one of a clutch of deals that have dipped below 3 per cent for a two- year fixed rate. It comes with all the features that you would expect from Nationwide with the ability to overpay by as much as £500 per month without any early repayment charge. Remortgages benefit from free valuation and free basic legal work.” Hollingworth notes the total fee of £999 for remortgages is cut to £499 for purchases.
Turning to the potential drawbacks Hollingworth says: “The only slight drawback stems from the limitation to 50 per cent LTV. This big equity requirement will clearly reduce the scope of availability.”
In terms of competitors, Hollingworth says Woolwich offers a rate at 2.98 per cent up to 70 per cent LTV with a £995 fee plus free valuation and legal work for remortgages.
“Northern Rock offers an intermediary exclusive at 2.89 per cent up to 70 per cent LTV but carries a bigger fee of £1,694. It offers free valuation and free legal work for remortgages.”
Suitability to market: Good
Competitiveness of rate: Good
Adviser remuneration: Good