Giles, marketing director of Purely Mortgages, said: "This week, Coventry Building Society has launched a competitive capped rate. The product runs until 30/6/07 and is 0.69% over Bank Base Rate, capped at 5.25%.
"Nationwide Building Society has launched the lowest 10 year fixed rate at 5.19%. Borrowers should be cautious about fixing for such a long period as it is impossible to predict what will happen to the market over such a long period so they could find themselves locked into what may become an uncompetitive rate. Not to mention the fact that changes in circumstances could leave the borrower having to pay a hefty redemption charge should they need to redeem the mortgage before the end of the 10 year period. Even as far out as Year 7, redemption of a £150,000 mortgage would cost £3,000
"It is looking more and more likely that the Bank Base Rate will rise in the near future and this feeling is reflected in the market with fixed rates starting to creep upwards. It will be some time before borrowers will be able to get a better fixed rate than those currently available, so now is the time to fix if you want need peace of mind for the next couple of years. The Alliance & Leicester’s 4.86% fixed until 31/5/07 is a market leader, especially in view of A&L’s excellent service standards right now.
"We have spotted another lender increasing the stealth charges on mortgages significantly. Leeds & Holbeck has increased its final mortgage closure fees to a whopping £260 from £165 – luckily these are all made clear on KFI documents. There has been a fair amount of increase in these types of fee over the past 6 months and the initial interest rate should not be the only consideration when choosing a product."
Current ‘Best Buys’
Lender
Rate
Term
Initial Rate
Reverts To
APR
Incentives
Early Repayment Charges
Fixed/Capped
Portman Building Society
2.35% Fixed
Until 31/5/07
2.35%
6.74%
6.2%
Beyond term
Stroud & Swindon Building Society
4.85% Fixed
Until 30/6/07
4.85%
5.74%
5.8%
Free valuation for remortgages
Within term
Alliance & Leicester
4.86% Fixed
Until 31/5/07
4.86%
5.5%
5.6%
Within term
Alliance & Leicester
4.99% Fixed
Until 31/5/10
4.99%
5.5%
5.5%
Within term
Intelligent Finance
5.15% Fixed
Until 31/5/07
5.15%
5.95%
6.0%
Free legal fees and refund of valuation for remortgages
Within term
Discount/Tracker
Alliance & Leicester
3.00% discount from SVR for 2 years then 1.25% over base for 1 year
3 Years
3.84%
6.84%
6.6%
Within term
Stroud and Swindon Building Society
0.10% under Bank Base Rate
Until 30/6/07
4.65%
5.74%
5.8%
Free valuation for remortgages
Within term
Portman Building Society
2.26% discount from SVR
Until 31/5/07
4.48%
6.74%
6.6%
Within term
Portman Building Society
0.06% under Bank Base
Rate
Until 31/5/07
4.69%
5.50%
5.6%
Within term
Lambeth Building Society
2.35% discount from SVR
31/5/08
4.59%
6.94%
6.6%
Within term
