Type: Fixed-rate mortgage
Fixed term: Until August 31, 2008
Fixed rate: 4.89%
Minimum loan: £15,500
Maximum loan: Up to 95% of valuation subject to a maximum of £350,000, up to 90% of valuation subject to a maximum of £500,000, up to 85% of valuation subject to a maximum of £750,000
Income multiples: Up to 3.5 times principal income plus second or 2.85 times joint, enhanced multiples negotiable
Arrangement fee: Loans up to £500,000 – £599, loans of £500,001-£750.000 – 0.6% of the original loan
Redemption fee: 3% of the mortgage balance in the first two years
Introducer’s fee: 0.25-0.35% of original loan
Tel: 0845 601 0763
This deal is part of range of new two-year fixed-rates from Portman Building Society. It is fixed at 4.89 per cent for loans up to 95% of valuation.
London & Country mortgage specialist James Cotton says: “For some time now, Portman have consistently been at the top of the tree when it comes to fixed rates. This new deal is fixed at 4.89 per cent for two years – until August 31, 2008 – and carries an arrangement fee of £599.”
Cotton also points out that there are early repayment charges of 3 per cent during the fixed-rate period, during which borrowers can make overpayments of up to 10 per cent without penalty.
“This rate is one of a number of two-year fixed deals that Portman is currently offering, ranging from a 4.48 per cent deal with a 1.5 per cent arrangement fee to 5.35 per cent with no fee and freebies for remortgages.
Overall, it’s a good range with something to suit most loan sizes,” he says.
Identifying the potential downsides of this deal Cotton says “One thing that works against Portman with all its rates is its use of annual interest. With competition as tight as it is, there is rarely one rate that is way out on its own, so the interest calculation is important. Despite Portman’s keen pricing, it will continue to lose business to lenders with similar or slightly higher rates due to its annual interest,” he says.
He also feels the lack of an online platform may also count against it, particularly as most of its competitors offer brokers the ability to apply for rates via the internet.
Scanning the mortgage market for promising competitors Cotton says: “This month has seen plenty of activity since the base rate rise and all rates are on the up. At the beginning of this year, best buy two -year fixes were around 4.3 per cent, but now anything below 5 per cent is a decent rate. Current competition comes from the likes of Alliance & Leicester and Royal Bank of Scotland with rates at 4.89 per cent. Yorkshire and Mansfield Building Societies both have direct-only rates below 4.8 per cent.”
Suitability to market: Good
Competitiveness of rate: Good
Adviser remuneration: Good