The mortgage, which has a £599 arrangement fee and has an early repayment charge of 3 per cent for the first 10 years, sees HBOS join Nationwide and a limited number of other players in the area.
James Carter, principal at Independent James, believed the product was good value for smaller loans.
“This is similar to the Nationwide product but HBOS has made a couple of big moves in terms of this and exit fees, which could influence the direction of the market. The rate is not far off as five-year rates are fairly similar at the moment, so if it is fully portable then it would be particularly attractive for people with smaller loans. These people are being hammered by arrangement fees at the minute, so if they can get a good deal and don’t have to remortgage and incur fees, this could be a good product for them.”
The government has been particularly keen recently to push the idea of 25-year loans but the market has been lukewarm at best to the proposal.
While the introduction of HBOS into a market often forces other lenders consider it, Jonathan Burridge, managing director of Quantum Mortgage Brokers, believed the market for the product just did not exist.
“I don’t think the market is ready for them and I would struggle to recommend one to a client. Never say never, but a lot of the problems in the US have come from long-term deals and the majority of people just don’t want a deal that long.”
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