The semi-exclusive product originally had an initial pay rate of 4.39% but since the recent decision to make further cuts to the Bank of England base rate this has since been lowered to 4.19%. The new initial pay rate of 4.19% is available until 2nd March 2011 after which it will revert onto Abbey’s standard variable rate (SVR) which currently stands at 5.44%.
It is available for all customers with a loan-to-value (LTV) of up to 60% and a maximum loan size of £550,000. The product comes with a total booking fee of £495, a product early redemption charge (ERC) of 3% and no higher lending charges. The annual percentage rate (APR) for the product is 5.4% and it is available for both purchase and remortgage but there is no remortgage package.
Phil Whitehouse, Head of TMA, commented: “December saw the Bank of England cut its base rate by one percentage point to 2%, its lowest level since 1951, and there is speculation from a number of economists that this isn’t the end of such interest rate cuts.
“This re-pricing by Abbey is a positive one and we are seeing a number of lenders shaving headline rates in response to the decision by the Monetary Policy Committee. However, more needs to be done and in order to continue moving the market forward the government needs to act quickly in guarantee mortgage-backed securities as highlighted in the recent Crosby Report.”
