Rob Clifford, managing director of Mortgage Force, has questioned the lender’s capability of sustaining the recently added proposition, claiming that Abbey’s financial model is inaccurate and not as competitive as it has made it appear.
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The lender offers 100 per cent loan-to-value on loans up to £50,000, including a two-year tracker and fixed rates over two, three and five-years.
Clifford said: “There are hundreds of dead lending products but they are still price sensitive. There are people who need 100 per cent mortgages who are relaxed about paying a premium for borrowing 100 per cent of what they need to buy their property, but people are still shopping around. I do welcome the introduction by Abbey into this area but it will only be successful if it is well priced.”
It has already been claimed that a better deal can be found. Michael Brill, director at Baronworth Investment Services, claimed that Cheltenham and Gloucester’s two year tracker would save borrowers £585 a year on a £150,000 mortgage.
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Ricky Okey, managing director of Abbey for Intermediaries, commented: “If you look at the overall proposition it is competitive, and we feel that by entering a market we haven’t been in since the late 1990s makes it stronger by Abbey being present. If you consider a decent rate, no higher lending charge, and up to £500,000 of lending, our product very competitive and I think it’s a strong proposition.”
