Moneyfacts.co.uk – weekly product update 03/10/2007
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- Northern Rock axes over two thirds of its mortgage range
- Fixed rates savings: the gap between the best and the rest widens
- Over 50s savers receive a boost
- Halifax turns a pale shade of green
Julia Harris, Mortgage Expert at Moneyfacts.co.uk – the leading independent financial comparison site, comments:
Northern Rock axes over two thirds of its mortgage range
“From tomorrow, the extensive Northern Rock residential and buy-to-let mortgage range will see its number of products cut by over two thirds, in its first product change since seeking emergency funding from the Bank of England.
“The change simplifies the range in two ways; first the volume of product choices has been drastically reduced, and secondly the products have been simplified with the complete withdrawal of its cash rebate scheme.
“The general trend is the removal of the lower LTV products and exclusive intermediary and direct deals, but still retains its full range of percentage fee products (ranging up to 3.5%), and its fixed rate Together deals at 125% LTV.
“With minimal change to pricing and the retention of the higher LTV products, this is certainly not a change which indicates that Northern Rock is changing its risk profile. The move towards more of a one size fits all product structure, by simplifying and streamlining products, brings the Northern Rock range more in line with the rest of the market and is more of a sign that it is looking to reduce operational overheads rather than anything more sinister.”
Rachel Thrusell, Head of savings at Moneyfacts.co.uk – the leading independent financial comparison site, comments:
Fixed rates savings: the gap between the best and the rest widens
“Peaking at 7% for only a matter of days, those savers who were not quick off the blocks will have missed out on the very best fixed rate deals. While the best accounts/bonds have remained stable for the last couple of weeks, many of the new issues are being launched with much lower rates, meaning the gap between the best and the rest is widening. With the trend likely to continue across the whole market over time, it may be best to act sooner rather than later before the few remaining good deals slip away too.
“With rate being the key selling point of a fixed rate bond, its surprising to see that 40% pay less than 6%, and 80% pay less than 6.4%, with the average standing at slightly less than 6%. Compare this with a no strings best buy variable rate of 6.40%, and many savers tying up their funds are not receiving a premium to compensate for the lack of access to their money. On the other hand they do have the added benefit that their rates will not fall, if, as predicted, base rate drops.
Examples of rate cuts:
Provider |
Term |
Old Rate |
New Rate |
Change |
Egg |
1 year |
6.25% |
6.00% |
-0.25% |
Halifax |
1 year (£500 tier) |
6.10% |
6.00% |
-0.10% |
3 year |
6.70% |
6.65% |
-0.05% |
|
4 year |
6.62% |
6.55% |
-0.07% |
|
5 year |
6.52% |
6.45% |
-0.07% |
|
Leek BS |
1 year |
6.50% |
6.25% |
-0.25% |
Tipton BS |
1 year |
6.50% |
6.25% |
-0.25% |
2 year |
6.25% |
6.00% |
-0.25% |
|
Moneyfacts.co.uk – the money search engine |
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Over 50s savers receive a boost
“This week has seen a welcome boost for the over 50s savings market. Coventry has relaunched its market leading Sixty-Plus Esave, available to those aged over 60, with a 50 Plus Esave account, paying the same headline rate of 6.40% but now available to anyone over the age of 50. Saga has increased the rate on its Online Saving account to match that offered by Northern Rock at 6.30%, but has reduced its 1 and 2 year fixed rate bonds, from a chart topping rate of 6.92% to 6.77% on its one year bond and from 6.62% to 6.58% on its two year deal. Abbey has launched a new issue of its 50+ Saver, so all new applicants will receive a 0.50% bonus for the full 12 months.
“Whilst consumers who qualify for over 50s accounts will be pleased to see these enhanced deals, the trend of rising rates is not exclusive to this niche market. In fact many variable rate accounts, particularly those that are internet based, are seeing increased rates too.
“With competitive rates available to any saver, the over 50s should not be fooled into thinking that a specialist deal will always offer the best rewards.”
Best Buys available to everyone
Company |
Account |
Gross |
AER |
Notice or Term |
Deposit |
Introductory Bonus |
West Bromwich BS |
Premium Bonus Tracker 2 |
6.50% |
6.17% |
Instant |
£1K |
Rate includes 1.00% bonus until 01.02.2008, then 0.50% bonus until 01.08.2008 |
Nottingham BS |
Postal Tracker 60 Issue 6 |
6.45% |
6.45% |
60 Days |
£1K |
None |
Bradford & Bingley |
Internet Saver |
6.40% |
6.40% |
None |
£1 |
None |
Chelsea BS |
Call Direct 30 3rd Issue |
6.40% |
6.40% |
30 Days |
£250 |
None |
Icesave |
Easy Access |
6.30% |
6.30% |
None |
£250 |
None |
AA |
AA Internet Access |
6.30% |
6.30% |
None |
£500 |
None |
Moneyfacts.co.uk – the money search engine |
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Best Buys available to the over 50s
Company |
Account |
Gross |
AER |
Notice |
Age min |
Min |
Introductory Bonus |
Coventry BS |
50 Plus eSave |
6.40% |
6.40% |
None |
50 |
£1 |
None |
Coventry BS |
Sixty-Plus Notice (4) |
6.35% |
6.35% |
60 Day |
60 |
£10K |
Rate includes 0.60% bonus for 12 months |
Northern Rock |
Silver Savings Online |
6.30% |
6.30% |
None |
50 |
£1 |
None |
SAGA |
Online Savings |
6.30% |
6.25% |
None |
50 |
£1 |
Rate includes 0.80% bonus for 6 months, then 0.70% bonus for next 6 months, then 0.25% bonus in year 2 |
Market Harborough BS |
onthedot Sixty+ Surfer |
6.10% |
6.10% |
None |
60 |
£1 |
None |
Loughborough BS |
Postal Classic PLUS |
5.90% |
5.90% |
30 Day |
50 |
£100 |
None |
Moneyfacts.co.uk – the money search engine |
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Halifax Websaver turns a pale shade of green
“By the end of the year, new and existing Halifax Websaver customers will see their accounts ‘carbon labelled’. With green becoming the new black in financial services, providers are becoming increasingly innovative and creative in ways which they can display the green badge.
“Carbon labelling is being used for the first time in the financial service sector: basically this means the account will include a green logo and customers will be informed of the carbon emissions produced by opening and operating the account. To maintain this badge, Halifax has pledged to reduce the carbon emissions of this account within a two-year period.
“In principle the idea should receive praise, as any commitment to reduce carbon emissions is a step in the right direction. However, the account Halifax has focused on is web based and probably already one of their ‘greenest’ products so without a committing to a specified reduction target, the Halifax Websaver is a somewhat pale shade of green.
“Each year we all receive around 400 pieces of unsolicited junk mail - 100m trees are used each year to make junk mail and 44% of it goes straight into the rubbish bin unread. Perhaps institutions should be taking steps to reduce the amount of unsolicited mail sent, with a move towards internet based messaging or mailing. It’s likely to have a more significant impact on the environment than trying to use labels and schemes, which only muddy the green waters.
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