The rate has been reduced on its lifetime mortgage from 6.25 per cent to 5.89 per cent per annum. LTV rates have also been revised for those aged 60 to 77 and GE Life will pay its own legal fees. £500 cashback on completion for all applications received by the end of 2005 is available for a limited period.
Simon Little, marketing and product manager at GE Life, said many providers have followed suit, increasing value for customers and moving lifetime rates closer to their standard mortgage counterparts. “With market rates continuing to remain affordable there’s no excuse for other providers not to pass on these favourable rates,” he said.
GE Life said it has supported the rate change by calling on providers to improve transparency in the industry specifically by compounding interest rates annually instead of monthly. It explained compounding rates monthly enables providers to claim a lower headline rate which actually provides less value to the consumer.
Little added: “The response to our product, especially our aggressive stance towards interest rates, has won us many friends in the intermediary world. At the same time we’ve introduced better value products to the market, the real winners of which are consumers. The latest amendments make us confident we can offer one of the best lifetime products in the sector.”
Simon Chalk, mortgage planner at Mortgage Portfolio Services, said: “It’s cracking for the consumer and adviser but not for the lender. It is cutting its margins and undercutting competition to achieve this rate. It’s a gamble. It may be difficult for others to compete against this. I suspect we’ll see it more but with a likely increase in application fees.”
