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
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.”
Suitability to market: Good
Competitiveness of rate: Good
Adviser remuneration: Good