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Mortgage providers offer bewildering range of rate/fee combinations
Julia Harris, mortgage expert from eMoneyfacts.co.uk comments
“The number of mortgage products offered by some lenders is more than enough to baffle the average man on the street. However, with the help of a financial adviser and a decent sourcing system, there is a rate and fee combination out there to suit every situation.
“To give you an idea of the choice available to prospective mortgage customers, eMoneyfacts.co.uk research reveals that Abbey have 89 different products, Scottish Widows 97, C & G 101 and Standard Life an incredible 219.
“The extended range of products on offer is partly due to lenders designing mortgages for specific situations, such as first time buyers, remortgage packages and large loan deals. The ever increasing array of mortgages is only part of the decision process for borrowers, They also have to take account of valuation fees, legal fees and most importantly if you have very little in the way of deposit, is the higher lending charge (HLC)
“The tables below show mortgage transactions at different ends of the spectrum and highlight that, with bigger loans, the interest rate becomes more important than the size of the arrangement fee.
“As well as trying to find the best rate/fee combination, there is also the percentage fee option to be taken into consideration. For every 1% of fee, this equates to an additional 0.69% on the rate over a two-year term. So unless some very low rates are going to be offered as part of the package, you can’t see there being much demand for these products.
“Choice is a good thing as far as the consumer is concerned, but it has become so vast that assistance from a financial adviser is pretty much essential if the customer wants to find the deal that is right for them.”
Lender |
Rate |
Fee |
True cost over 2 years |
Skipton BS |
5.79% to 31.08.2009 |
£599 |
£17,650.28 |
Cheshire BS |
6.24% for 2 years |
£0 |
£17,794.32 |
Cheltenham & Gloucester |
6.33% to 30.9.09 |
£99 |
£17,843.80 |
Based on a loan of £112,500, property value of £150,000. 75% LTV. Legal fees calculated as £200. |
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Source www.emoneyfacts.co.uk 29.08.07
Lender |
Rate |
Fee |
True cost over 2 years |
Cheshire BS |
5.69% for 2 years |
£899 |
£85,539.64 |
Yorkshire BS |
5.49% to 30.11.09 |
£1,995 |
£85,666.12 |
Principality BS |
5.69% to |
£999 |
£86,274.64 |
Based on a loan of £562,500, property value of £750,000. 75% LTV. Legal fees calculated as £200. |
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Source www.emoneyfacts.co.uk 29.08.07
Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.
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