A Golden Hello
We've said it before and no doubt we'll say it again, but you
could be forgiven for thinking the current mortgage market is a
It seems no-one wants to lend and lenders certainly do not want
to actively look for ways to help. Indeed, for many years now,
innovation in the mortgage market has been notable only by its
absence. Well this is finally starting to change.
It is one such piece of innovation that we would like to
highlight. We have recently launched a new track and fix mortgage -
we call it the Golden Hello mortgage. We believe is the answer for
many borrowers in the current market. For those sitting on their
mortgages' metaphorical hands for some time now, this could just be
the reason to jump out of your seat.
It is our belief that a fixed rate offers no value for the next
two years; we now think that it is highly unlikely that bank rate
will move for two years. So, the ideal solution is a product that
starts with a low tracker rate and switches automatically to a
predetermined fixed rate for the next three years.
Well, wouldn't you know it we have one that does exactly
So, the vital statistics:
- Bank Rate +2.19% for two years = current pay rate of 2.69%
- Followed by a fixed rate of 3.69% for 3 years
- Max LTV 75% (although it is available with a higher rate for
- Arrangement fee of £1,995 for loans to £750,000 and £3,990 up
- Early Repayment Charge is 5/5/5/4/3% of the total loan during
the 5 years
- Can repay up to 10% per annum penalty free
- And the overall cost for comparison is 5.1% APR
Whilst those are impressive vitals, the fee may have you raising
an eyebrow (or two). To add perspective, it's the equivalent of a
two year deal having an £800 fee. The pricing means that this
product will offer better value than the best five year fixed rate
unless Bank Rate averages more than 1.75% over the next two years.
We think there's about as much chance of that as the nation giving
the latest, and last, Harry Potter a miss.
The beauty of this track and fix arrangement when compared to
its closest alternative, a droplock mortgage, is that the fixed
rate pricing is already set. You know exactly what you'll be
paying. In addition, it also negates the possibility of not locking
at the right time and missing the boat.
As ever, this is not likely to be the answer for everyone; we
have said countless times that generic advice will not do in this
market. However we believe that this is the closest thing to the
answer for many that we have seen in years.
John Charcol is widely considered to be the UK's leading
independent mortgage adviser and is part of the Towergate
So, for more information on your company’s commercial
borrowings, or your own personal mortgage, get in touch with John
Charcol now by visiting www.charcol.co.uk or by calling 0800 71 81
Your initial mortgage consultation is obligation free. There
will be a minimum fee for our mortgage service of £450, of which
£150 is payable when you apply, and we will retain the commission
from the mortgage lender. Alternatively, you can choose the fee
only option which is typically 0.65% of the amount borrowed. The
precise amount will depend on your circumstances and mortgage loan
amount, and will be discussed and agreed before you make a mortgage
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP
REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT