Charcl say that at 4.99% the rate is below the cheapest two-year fixed rates offered by Halifax, Abbey and in line with rates offered by the remaining big three banks. Therefore, it believes borrowers will not need to make much use of the offset facility for this product to prove better value than a non-offset fix.
Key Features
- 4.99% fixed to 31/07/07, (5.6% APR)
- Rate reverts to Bank Base Rate +0.69% - Currently 5.44%
- No extended early redemption penalties
- Can repay up to 10% per annum ERC free
- Up to 6 savings accounts and 6 current accounts can be linked to the loan
- Max LTV 85%
- Min loan £150,000
- Daily interest calculation
Ray Boulger, senior technical manager at Charcol, comments: “This product is by far the best 2 year fixed rate offset on the market and indeed is priced only slightly higher than a traditional 2 year fixed rate with no offsetting facilities. Borrowers will therefore not need to make too much use of the facility to obtain some clear benefit from taking this deal. In addition, it is also worth noting that for the remaining term the rate reverts to an impressive Bank Base Rate +0.69%, giving a current pay rate of 5.44%. Therefore, although borrowers may want to switch to another fixed rate at the end of this deal, this competitive long-term pricing provides them with the luxury of not needing to move immediately should they wish to wait for lower rates.”
Another feature to note is the ability to have 6 savings and 6 current accounts attached to the mortgage. Current accounts can be in a single or joint name but customers must be named on the mortgage in order to offset their savings or current account balance.
Boulger continues, “For borrowers to get the maximum benefit from this product it is strongly recommended that the mortgage balance is left unchanged at all times and that all extra available funds are added to a linked savings or current account. This makes accessing the funds far easier and also it effectively means there is an unlimited ERC free part paydown facility, whereas ERC free overpayments into the mortgage are limited to 10% pa.”
A remortgage rate of 5.09% is available with a free valuation and free legals. Charcol hopes this will appeal to most remortgagers, by helping to keep costs down. However, as the 4.99% rate is available to remortgagers, the size of a borrower’s loan will be the deciding factor as to which rate to take.
