What is it?
A mortgage that will charge 0.49 percentage points more than the Bank of England base rate for the full term, giving a current pay rate of 4.99 per cent.
What are the plus points?
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There are no application or completion fees and there is free legal and valuation work on remortgages. Borrowers can overpay or take payment holidays. There are no early repayment charges (ERCs), and there is no higher lending charge up to 90 per cent of the value of the property, although Skipton will still lend up to 95 per cent.
What are the drawbacks?
Nick Gardner, of Chase De Vere Mortgage Management, the broker, says there are slightly lower rates on similar deals from rival lenders, which “may give other deals the edge”. For instance, Saffron Walden Building Society offers a virtually identical term tracker at 0.30 percentage points above the base rate for the life of the loan, although it does have a £499 arrangement fee and does not offer cashback. This deal would in most cases work out cheaper overall
The verdict
Thumbs up. But only if you do not want to pay out a lot in fees. Mr Gardner says: “The idea for a term tracker is to keep the same mortgage for the long term, so it is usually best to go for the lowest rate because the savings will accumulate over the years. So although the Skipton deal is very good, it is pipped by the Saffron Walden tracker.”
REBECCA O’CONNOR