Type: Self-cert tracker mortgage
Tracker term: One year
Tracker rate: 0.8% above Bank of England base rate, 1.1% above Bank of England base rate with cashback
Payable rate: 5.55%, 5.85% with cashback
Minimum loan: 25,001
Maximum loan: Up to 85% of valuation subject to a maximum of 300,000, up to 75% of valuation subject to a maximum of 500,000
Income multiples: Up to 3.5 times principal income plus second or three times joint
Conditions: 500 cashback
Arrangement fee: 495
Redemption fee: 5% of amount repaid in first year, thereafter one months interest or notice
Introducers fee: 0.5% of original loan subject to a 250 minimum and 3,500 maximum
Tel: 0845 070 1999
Platforms self-cert one year base rate tracker mortgage tracks at 0.8 per cent above the Bank of England base rate for one year, then reverts to a lifetime tracker rate of 1.75 per cent above the base rate. There is a 500 cashback option at the higher rate of 1.15 per cent above base rate.
London & Country mortgage specialist James Cotton thinks the Platform tracker is a respectable deal and points out that is part of a strong self-cert portfolio from the specialist lender. He says: “After increasing both its rates and arrangement fees last year in an effort to reduce business levels, Platforms new portfolio launch is a definite move back into the market. It will be interesting to see how its self-cert business improves in 2005 as a result.”
Cotton points out that the deal is pegged at 0.80 per cent above the base rate for one year, giving a current rate of 5.55 per cent and it is available up to 85 per cent of valuation. He says: ” It should appeal to those looking for a short-term deal with no extended tie-ins, and particularly to self-employed borrowers who are unable to verify their income.”
Cotton refers to an option to receive 500 cashback in return for a higher rate of 5.85 per cent , which he feels may appeal to those looking to cover remortgage costs.
However, he adds: “Being a fixed amount of 500, the cashback will not be good value to those with larger loans. Someone with a 200,000 interest-only loan would pay 600 more interest over the first year if they choose the cashback compared to the lower rate.”
He says: “One year is relatively short-term after which the rate reverts to bank base rate plus 1.75 per cent. Borrowers who are happy to tie themselves in for longer may get better value from Platforms two, three or five year trackers.
“Also, the deal offers no flexibility to make over or underpayments Platforms only self-cert deal with this facility is a lifetime tracker with a current rate of 6.00 per cent.”
According to Cotton, The Mortgage Business has just reduced the rates on its self-cert deals, so there should be some competition between the two. He adds: “TMBs trackers are not quite as keen as Platforms, but most of them benefit from no early redemption charges. TMBs range includes a two-year tracker at 5.60 per cent.”
Cotton believes other lenders such as BM Solutions, GMAC and Coventry will also be competing with Platform in the self-cert market. He explains: “GMAC, for example, has a two-year discount at 5.45 per cent up to 85 per cent of valuation.”
Suitability to market: Good
Competitiveness of mortgage rate: Good
Adviser remuneration: Average