View more on these topics

Skipton 90% deal has 9/10 appeal

Skipton Intermediaries – Two-Year Fixed Rate Purchase and Remortgage

Type: Fixed-rate mortgage

Fixed term: Until April 30, 2013

Fixed rate: 5.38%

Minimum loan: No minimum

Maximum loan: Up to 90% of valuation subject to a maximum of £250,000, up to 85% of valuation subject to a maximum of £400,000, up to 80% of valuation subject to a maximum of £750,000, up to 75% of valuation subject to a maximum of £1m

Income multiples: Based on affordability

Conditions: Capital repayments of up to 10% a year allowed in the fixed-rate period without penalty, free valuation and free legal fees for remortgages, available direct and through intermediaries

Arrangement fee: £900 completion fee and £95 application fee

Redemption fee: 3% of the amount repaid in the first two years

Introducer’s fee: Subject to negotiation

Contact: www.skipton-intermediaries.co.uk

This mortgage from Skipton is fixed at 5.38 per cent until April 30, 2013 and is available for loans of up to 90 per cent of valuation.

Looking at the ways in which this deal is useful to IFAs and their clients, London & Country mortgages head of communications David Hollingworth says: “With a dearth of high LTV mortgages the main feature to immediately catch the eye is the maximum LTV of 90 per cent.  It is great to see a lender like Skipton looking to offer a product like this, which could be so useful not only to first time buyers, but anyone struggling to meet tough deposit requirements.”

Hollingworth finds the fixed rate extremely competitive at this LTV and regards the fee structure as pretty typical, with a total arrangement fee of £995.  “It is also available for remortgage unlike many 90 per cent rates and even offers help with remortgage costs,” he adds.

In terms of flexibility, Hollingworth again describes this deal as typical when compared with most fixed rates, in allowing up to 10 per cent of the mortgage each year to be paid without any early repayment charge in the fixed-rate period.

Turning to the less appealing aspects, Hollingworth says: “There isn’t anything to dislike about the product. We would all like lower rates for this market but this offering is very attractive.”

According to Hollingworth, the main competition comes from Newcastle Building Society which offers a direct only two-year fix at 5.15 per cent for loans up to 90 per cent LTV. Hollingworth feels the Newcastle deal is a leading product but points out that is aimed squarely at the purchase market, not remortgage.

Summing up, Hollingworth says: “It is refreshing to see a lender like Skipton keen to offer something to the higher LTV market at such a good rate.  The more of this kind of deal the better for hard -pressed first time buyers.”

BROKER RATINGS

Suitability to market: Good

Competitiveness of rate: Good

Flexibility: Good

Adviser remuneration: Good

 Overall 9/10

Recommended

4

Risk profiling: Psychological conditions

A few weeks ago, I wrote about the perils of risk profiling, so I was pleased to read the FSA paper that identified lots of short-comings in risk-profiling tools as well as in their users. Some of these are obvious but the FSA’s prescriptions have scary implications for advisers and product providers. To start with […]

KATE_SMITH.jpg

Relief map

Aegon senior pensions development manager Kate Smith says adviser clients will need help navigating the tax-relievable contribution changes

3

Nest talks with FSA over RU64 rule

Nest is holding discussions with the FSA over the possibility of applying the RU64 rule to the Nest auto-enrolment scheme. The RU64 rule states that advisers recommending a pension that is not stakeholder have to explain in writing why the recommended policy is “at least as suitable as a stakeholder pension.” Speaking at the Tenet […]

Recent events highlight the risk in emerging markets

Should we read much into the surprise contraction of our economy announced last month? By now, we all know that GDP shrank by 0.5 per cent during the last quarter of 2010, catching out forecasters, all of which expected a slowing in growth – but growth nonetheless. The answer is probably not. The first pass […]

A DGT with 100% access and 100% discount?

Clare Moffat, Technical Manager, looks at the benefits of pensions from an IHT perspective. 100% access and 100% discount – what type of wrapper could this be? A pension! Post flexibility there is 100% access (for those over 55) and normally pensions are inheritance tax (IHT) free. With flexibility the options available on death mean […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment