Intelligence said it acknowledged the arrangement fee was at the top end of the scale but added that the rate would be highly attractive to borrowers now coming to the end of their current fixed rates.
The mainstream product is fixed for 18 months after the date of completion and comes with a maximum LTV of 90 per cent while the arrangement fee can be added to the loan.
Sally Laker, managing director of Mortgage Intelligence, commented: “We appreciate that the arrangement fee is quite high. But we have noticed the price of two-year deals are slowly increasing or disappearing altogether, so this product will be highly competitive at 4.99 per cent. Clients will also be able to weather the next 18 months against any interest rate changes.”
London-based sole broker Roy New said he was outraged at the arrangement fee. “It is absolutely diabolical that this amount should be charged. It’s just a way of raking in the money. A rate of 4.99 per cent is very good but I would advise clients to pay the arrangement fee upfront so as not to add more onto their mortgage payments.”
“But who will want to pay an arrangement fee of £799? There is a danger some brokers would not even make the client aware of this fee and have it added to the loan,” New added.
