The cheapest rate available is Bank rate – 0.01%, giving a current pay rate of 4.99%, and this deal carries a 2.75% arrangement fee. Borrowers who don’t need such a low rate can pay Bank Rate + 0.74%, current rate 5.74%, for a fee of 1.25%. Both of these deals are available for mortgages between £500,000 and £5,000,000 up to a maximum loan to value (LTV) of 65%.
Ray Boulger of John Charcol commented: “Many borrowers will be coming off 5 year fixed rates of less than 4% in the next few months, and many others will be coming to the end of 2 or 3 year fixed or tracker mortgages with rates well under 5%. Switching to a new large loan fixed rate without paying a big fee will mean paying a rate close to 7%. Even switching to a new tracker without paying a big fee will mean paying well over 6%.
“These two deals are designed to accommodate borrowers who can not easily afford to pay (or can but don’t want to) the much higher rates which would be necessary without a big fee being used to subsidise the rate. They are available to those who want to borrow over £500,000 but particularly good value for those who need over £1million.”
Both mortgages are available for purchase and remortgage and the fee can be added to the loan. There are no early repayment charges (ERCs) and so if borrowers can afford to make overpayments they can pay off all or part of the fee, or even more, whenever it is convenient.
