The near prime product is funded by Scarborough Specialist Mortgages and tracks the Bank of England Base Rate (BBR) +0.99 per cent (currently 5.99 per cent) for two years from completion and does not tie the borrower into a higher reversion rate.
The product has flexible terms including capital repayments, underpayments and payment holidays and during the first two years up to 10 per cent capital repayments are allowed each year without any penalty.
There are no early repayment charges (ERCs) after the two year term, but 5 per cent of the sum repaid is charged for full or partial redemption of the mortgage in year one and two. The product has an arrangement fee of £995.
Sian Brown, national sales manager at Trustguard, said: “Unlike other mortgages that offer an appealing rate for a limited period of time and then revert to a much higher rate, this is pegged at 0.99 per cent for the full term of the loan.”
Nick Gardner, director at Chase de Vere Mortgage Management, said: “Given that it is targeting the light adverse, or "near prime" market, it looks a reasonable proposition. But the problem is what defines "near prime"? It may well be that a broker could persuade a mainstream lender to take a "near prime" borrower on a standard mortgage rate. That said, for a self-cert deal, with this degree of flexibility and high LTV - and reasonable fee - the Trustguard deal looks pretty good. However, if flexible features aren't a necessity and if the credit score damage is only mild, there are probably better deals on the market.”
