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Product matters

Co-operative Bank deserves a pat on the back for its sensibly structured 10-year fixed-rate mortgage.

Whatever your view of Professor Miles&#39 findings and thesis, there can be no argument against allaying clients&#39 affordability fears and, for some, the certainty of holding today&#39s payments where they are, is absolutely paramount, particularly for those clients who are borrowing at or near their income maximum, a fixed-rate product is worth its weight in gold.

A long-term,25-year fixed deal is always met with more caution but 10 years is very attractive to many, especially when priced at 5.69 per cent and available up to 95 per cent LTV.

It was only a short while ago that Woolwich, Halifax and Coventry all had 10-year offerings priced at between 5.79 per cent and 6 per cent and these were regarded as very keen rates. Co-operative Bank&#39s 5.69 per cent is well positioned and the free legals and valuation for remortgage customers is a sensible move.

The 10-year fixed product from Standard Life at 5.49 per cent will give Co-op&#39s a run for its money but Co-op&#39s stands well against Northern Rock&#39s 5.89 per cent.

Some may wince at Co-op&#39s initial 6 per cent redemption penalty but consumers have to realise that they cannot get such a well-priced deal and expect total freedom.

The free energy report and Climate Care charitable donations help to set Co-op apart from the pack and the bank&#39s highly ethical policy may influence some clients&#39 decision about which lender to choose.

Robert Clifford is managing director at Mortgageforce



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