The “Triple Protector” mortgage is designed to cater for the sizable number of potential First Time Buyers who are nervous about buying now in view of the wildly divergent views on where property prices are heading. Availability, however, is not limited to first-time buyers and the mortgage is available to all purchasers. Despite the unique additional benefits offered by this mortgage it is priced at a very competitive 4.99%, fixed to 31/8/10 and available up to 95% Loan To Value with no Higher Lending Charge.
Ray Boulger, senior technical manager at John Charcol, comments: “The fate of house prices has almost become a national obsession, with wildly conflicting views all too apparent. As a result many consumers have become extremely wary of the housing market and are now confused as to what the next move in values will be. The launch of this loan might appear to indicate our view is that there will be a further downturn in the housing market, but nothing could be further from the truth. We do not expect significant house price falls on a national basis, although there may be local soft spots. In fact we still stand by the forecast we made at the end of last year that house prices will increase by 4% in 2005.
“However, not everyone shares our view and this mortgage is aimed at buyers, especially first-time buyers, who need some extra reassurance. A rate of 4.99% for a 95% LTV 5 year fixed rate mortgage with no higher lending charge is on a par with the cheapest other 5 year fixes available to 95% and so the Mortgage Payment Assistance cover and no negative equity guarantee are genuinely being provided at no extra cost to borrower.”
Product Details – The Triple Protection
1. Fixed rate for 5 years: 4.99% (6.2% APR) fixed to 31 August 2010.
2. Unemployment, sickness and accident insurance – the mortgage will provide eligible customers with free Mortgage Payment Assistance cover for their mortgage payments during the fixed rate term for up to 12 consecutive months to a maximum monthly payment of £1,500. There is a waiting period of 60 days from the claim date until benefit become payable.
3. Protection from negative equity. If, during the fixed rate term, the mortgage has been paid wholly or partly by the Mortgage Payment Assistance policy for at least 6 months, the borrower has a 3 month window during which they can give notice of intention to sell the property. This doesn’t commit them to a sale but providing a sale completes within 17 months of the initial claim on the Mortgage Payment Assistance policy any negative equity as a result of the sale will be written off by the lender with no further obligation whatsoever on the borrower. The borrower will be responsible for the sale costs.
Additional Product Features
- Available up to 95% LTV.
- No Higher Lending Charge.
- Early Repayment Charge (ERC) of 5% to 31/8/10, but up to £499 per month can be repaid with no ERC. No ERC will be charged if the mortgage is redeemed as a result of the property being sold under the no negative equity guarantee.
- Maximum loan of £250,000 but cases up to £350,000 (still up to 95% LTV) will be considered.
- Minimum age: 21.
- Lender’s current exit fee: £125.
Boulger continues, “By definition the deposit put down by the borrower is not covered by the no negative equity guarantee and so this is primarily a mortgage for those with a small deposit. The larger the deposit the less benefit the no negative equity guarantee provides. However, in view of the free Mortgage Payment Assistance cover it is also very competitive for any borrower who would have chosen to pay for this type of cover with their mortgage. We believe this mortgage will appeal to many potential borrowers, but, as with any mortgage, it will not be right for all. However, it addresses in a responsible way the biggest concern of many potential new entrants to the housing market and, as such, will particularly appeal to them."
Robert Hollinshead, Chief Executive of Newcastle Building Society, added “For many potential borrowers uncertainty over interest rates, employment and potential house price falls can make home ownership seem too risky, especially for first time buyers. The “Triple Protector” Mortgage will help first time buyers overcome these concerns and take that all important first step to becoming a property owner. By offering a 5 year fixed rate and insurance protection against both income loss and house price falls, this mortgage offers the best of both worlds - peace of mind and a rate that is not loaded to reflect the unique protection it provides.”
The Triple Protector Mortgage is funded by Newcastle Building Society and is available exclusively through John Charcol.
