View more on these topics

Principality mortgage has more than meets the eye

Cardiff-based Principality Mortgages’ new three-year fixed rate mortgage is available to all borrowers.

The mortgage, which is fully portable, has a fixed rate of 5.89 per cent until November 30, 2004. The maximum loan to value for first-time buyers is 95 per cent, with remortgages restricted to a maximum valuation of 90 per cent.

Principality will refund valuation fees if its own valuers are used and the mortgage has no arrangement fee. But there is compulsory buildings and contents insurance, and an early redemption penalty of two per cent of the advance until the end of the fixed rate period.

The most competitive three-year fixed rate mortgage currently available is from Darlington Building Society. According to Moneyfacts, on August 21, 2001 this has a fixed rate of 5.19 per cent up to a maximum valuation of 90 per cent. Like the Principality product it has compulsory buildings and contents insurance, but it is not portable and has an arrangement fee of £199. The redemption penalty is also higher at six month’s interest during the fixed rate period.

Examining the costs involved in these mortgages, the Principality product will have monthly repayments of £637.59 and the Darlington mortgage £602.58. Should the mortgages be redeemed in the first year, the penalty on the Principality mortgage will be £2,045 and on the Darlington mortgage £3,335. Although it has a higher rate, the Principality product is more attractive because its other fees are lower.

But a borrower who goes for the Principality mortgage must be aware that the buildings and contents insurance is compulsory and there may be better deals available if they shop around. Someone who goes for the Principality product might decide that they could put up with a higher interest rate if it means lower redemption penalties.


Four UK funds on way in F&IS rebrand as Isis

Friends Ivory & Sime is to rebrand under the name Isis for its relaunch into the retail market next month. The firm will launch three funds – Aim growth, UK smaller markets and UK dynamic – as part of a new Oeic, which will open on September 1. A fourth fund – UK progressive growth […]

Equitable can sail on if policyholders stop panicking

Stop the panic! Everyone makes the Equitable situation sound like the Titanic disaster. The huge loss of life on the Titanic was largely due to inappropriate action. Everything that is happening at Equitable appears to be as it should be, given the circumstances. The problem is being confronted head-on and the vessel is built to […]

The New advisers

There are still many niches remaining to be populated by IFAs wanting to set up specialist practices. This week, we look at how four IFAs came to specialise in the very different areas of long-term care insurance, ethical investing, school fees planning and venture capital. Philip Spiers is a partner with the Nursing Home Fees […]

Pinnacle takes the online route

Pinnacle Insurance is joining the online insurance bandwagon with the introduction of Helpupay.Helpupay is a mortgage payment protection insurance (MPPI) product and is aimed at all mortgage borrowers, as long as they are working for a minimum of 16 hours a week.Although the plan is available online, it can also be taken out by phone […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    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