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Standard leads way with 25-year cap

Standard Life Bank&#39s new25-year capped-rate mort-gage could set a trend

for the industry.

Standard claims the launch of Futureperfect is the first time in the UK

that a banking arm of a life office has used the annuity book of the parent

company to fund a product.

Normally products are financed by account deposits.

Savills Private Finance industry analyst Mark Chil-ton says competitors

withsimilar business set-ups,such as Prudential and Legal & General, are

very likelyto follow Standard LifeBank&#39s lead.

The product, which is capped at 6.25 per cent, is expected to be a big

seller among borrowers who are shopping for a secure loan over five years.

Mortgage brokers are saying they will market the loan as a five-year

capped rate with the option to continue.

There are no redemption penalties on the mortgage after five years.

The mortgage has a maximum loan to value of 90 per cent up to £350,000.

Interest is calculated on a daily basis and the company will make a

contribution towards borrowers&#39 legal fees. Applications can be made over

the phone.

London & Country Mortgages senior manager Patrick Bunton says: “Most

borrowers will be reluctant to lock themselves into a25-year deal but as a

five-year loan it is an easy sell.”

Standard Life Bank finance director John Gill says: “What this product is

about is long-term security and long-term control over their outgoings. If

people decide to remortgage after five years, they will be missing out on a

very valuable guarantee.”


Mutuality not dead says Standard Life chief executive

Standard Life chief executive Jim Stretton entered the mutuality fray today saying the concept of mutually owned companies is far from dead. He says Standard Life has an obligation to serve not only current policyholders but future generations as well. He maintains they will be best served by the life office remaining a mutual. Stretton […]

The industry can&#39t afford stakeholder

So now we have been treated to another assassination programme byPanorama, this time on pensions, after the recent cynical offering by thesame programme on the subject of endowment policies.Looking at the financial mechanics of the proposed plans as directed byHMG and considering them in the light of whatI feel are a number ofrelevant industry statistics, […]

&#39Societies must give pledges to push mutuality message&#39

Building societies are being warned not to be complacent about mutualityand to make themselves more relevant to their customers before theycomplain to the Government.Speaking at the BSA annual conference in Edinburgh last week, outgoingchairman David Smith urged societies to come up with three pledges topromote the benefits of mutuality and then take to the road […]

IFA National creates holding company

IFA National Inter-Alliance has created a holding company which will act as the umbrella group for its interests in the UK and internationally. Up until now, Inter-Alliance has been both the parent company and the IFA firm. The move is an attempt to clear up the internal operations of the company. The holding company, Inter-Alliance […]

DB transfers – one more factor to consider

Jim Grant – Senior Product Insight & Technical Support Analyst We look at how higher DB transfer values could cause a lifetime allowance issue and how that affects the advice process. Advisers are receiving an increasing number of requests from clients looking to transfer their pension from final salary schemes to personal pensions. This is a […]


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