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Product matters

Abbey for Intermediaries has launched a large loan deal aimed exclusively at its Premier Mortgage service introducers.

It is offering a variable tracker rate of Bank of England base rate plus 0.5 per cent, which gives a pay rate of 4.25 per cent (4.3 per cent APR).

This is available for large-case applications, which is any loan of £250,000 or over. It is clearly targeting the remortgage market, with clients being aware of costs of remortgaging so it is offering the following benefits: free valuation up to £1,100, free legals if they use the Abbey remortgage service and up to £200 cashback to clients who are moving home.

The Abbey also offers overpayments, underpayments, payment holidays and an offset facility if the client banks with the Abbey.

The latter facility is attractive to financially astute clients who can assess the benefit of offsetting mortgage costs against relatively dormant savings.

There are no redemption charges but if the mortgage is redeemed before October 21, 2005, clients will be asked to repay benefits received.

If this product is successful the Abbey has more plans for exclusive products for the intermediary market.

This product is not for everyone and, with a minimum loan of £250,000, the market penetration will not be great. But the Abbey is a fair provider and I would suggest that the product sits well with its reputation generally to deliver and, provided that the reorganisation of the intermediary sales arm does not disrupt relationships, then it will achieve its goals.

Mark Mountney is managing director of Premier Mortgage Management

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