View more on these topics

Nationwide marked down over &#39Cat&#39 cap mortgages

Nationwide Building Society has been criticised for offering Catmarked mortgages which IFAs claim do not comply with the Government&#39s standards.

The UK&#39s biggest building society is accused of exploiting a technical loophole which allows it to market discount mortgages as Catmarked while charging borrowers redemption penalties.

Under the Cat-standard rules, discount-rate mortgages are banned from charging exit fees.

The controversy surrounds Nationwide&#39s budget option loans, which provide borrowers with a discounted mortgage rate for the first two years.

IFAs say Nationwide&#39s small print shows the budget options are capped-rate mortgages with an uncompetitively high rate of 9.99 per cent, a hidden price ceiling “highly unlikely” to be reached.

This allows Nationwide to load redemption penalties on the first five years of the mortgage without borrowers realising they will be charged for redeeming the loan early.

IFAs claim this makes a mockery of Cat standards and exploits consumer trust in the requirements. They say the move contradicts Nationwide&#39s policy of fairness for borrowers and sets back the mortgage industry&#39s efforts to promote transparency in products.

Charcol senior technical manager Ray Boulger says: “Nationwide has driven a coach and horses through Cat standards and has shown everyone else a way through them as well.”

Sedgwick Independent Financial Consultants consultant Steve Smith says: “I am unhappy that a major lender feels it can bring out a Catmarked product which is clearly against the spirit of the standards and the mortgage code. It should not be allowed to sell these products as Catmarked.”

A Nationwide spokesman says: “The loans are not being marketed as capped because the reason borrowers will choose them is because they want to pay lower rates at first.”

Aberdeen Asset Management continued on the acquisition trail this week as it snapped up Swedish property manager Celexa for £16.5m.

Celexa, which manages property in Sweden, Holland and the UK, has assets of £1.9bn. It will increase Aberdeen&#39s property assets under management by 83 per cent to £4.2bn from £2.3bn.

Aberdeen will pay Stock-holm-based Swedish life insurer Alecta £15.1m in Aberdeen shares and the remaining £1.4m in cash.

Aberdeen Property Investors chief executive Ian Reid says: “Celexa provides us with an excellent international platform to exploit our expertise in the emerging European property asset management market.”

Recommended

IFAs urged to review employers&#39 life cover

Royal & Sun Alliance is urging IFAs to use stakeholder&#39s introduction to review employers&#39 life cover. It says many advisers will be reviewing employers&#39 pension arrangements against the 1 per cent benchmark, which should allow the opportunity for unbundling risk benefits from the pension arrangement. It says employers have usually opted for a bundled approach […]

Govett selects its new Isa

GOVETT INVESTMENTSIsa SelectorType: Mini or maxi Isa investing in unit trusts and Oeics.Aim: Growth and income by investing in unit trusts and Oeics.Minimum investment: Lump sum £500, monthly £50.Maximum investment: Lump sum £7,000, monthly £583.Catmarked: No.Investment choice: Investors choice of UK blue chip, European blue chip, US blue chip, Asia Pacific, UK small companies, European […]

ScotMut combines tech and with-profits

Scottish Mutual is combining investment in technology and with-profits in a single-premium unit-linked bond. With Profits.com allows investors to choose the most appropriate split to suit their circumstances between its technology fund and with-profits fund. Minimum investment is £5,000 and maximum £500,000 although there is no minimum or maximum proportion that can be invested in […]

Scottish Life International launches 5th Income & Growth Bond

Scottish Life International is launching the fifth in the series of its Income & Growth Bonus Bond, the first four of which achieved combined sales of £200m since February 2000.Series 5 of the Income & Growth Bonus Bond offers either gross annual income of 11.2 per cent each year or 2.7 per cent each quarter […]

Tax year-end planning with the family

From the Technical team at Prudential Let’s face it, many aspects of financial planning involve a lot of technical detail. At our face-to-face events, we’ve had great success bringing these technical topics to life through the use of practical case studies. Meet the family Prudential’s Planning Matters hub brings together a fictional family and explores […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com