Key aspects of the product include:
• 3.99 per cent fixed to 30 June 2008 with a 0.25 per cent fee
• Some 0.25 per cent better than next best two-year fix
• The overall cost for comparison is 6.3 per cent APR
The product is aimed at borrowers wishing to borrow £500,000 or over up to a Loan-to-value (LTV) of 75 per cent. In addition to the rate, the mortgage is flexible, with borrowers being able to overpay up to 10 per cent per annum and use any such overpayments if required to take payment holidays or make underpayments.
Ray Boulger, senior technical manager at John Charcol, commented:"This really is easily the market-leading two-year fixed rate for loans of £500k and above, and there is no maximum loan.The arrangement fee is 0.25 per cent of the loan and so when this is added to the rate borrowers will have an effective, annualised rate of 4.12 per cent. The next two lowest two-year fixed rates, without ERCs after the introductory period or a high percentage fee, are at 4.35 per cent and 4.39 per cent, both with a fee of £499, and so it is clear to see just how exceptional this mortgage is."
Key Details:
* 3.99 per cent fixed to 30 June 2008.
* Reverts to Bank Base Rate +1.99 per cent, currently 6.49 per cent, 6.3 per cent APR.
* Maximum LTV is 75 per cent.
* Arrangement fee of 0.25 per cent, which can be added to the loan.
* £75 exclusive John Charcol fee
* Early Repayment Charges — 5 per cent to 30 June 2008 but can repay up to 10 per cent pa ERC free.
* Minimum loan size £500,000, no maximum.
* Flexible — payment holidays, underpayments from overpayments.
* Current exit fee: £195.
Boulger concluded: "Although in cash terms the arrangement fee on this deal is relatively high the interest rate is so low that the facts speak for themselves. This mortgage will, without question, save borrowers wanting to borrow at least £500,000 a serious amount compared to the next best deal and these savings only get better the greater the value of the mortgage.
"A further benefit is the option to mix and match with a two-year tracker, with the same end date and a rate of BBR -0.51 per cent, giving the same initial pay rate of 3.99 per cent. A minimum of £500,000 must be on the fixed rate but the minimum on the tracker is only £25,000. Borrowers opting for this option would only pay the 0.25 per cent arrangement fee on the fixed amount. However much you borrow on the tracker, you will only ever pay the fee on the fixed element."
