MortgagesNov 7 2013

Cambridge targets FTBs with fixed-rate offer

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The deal is available to the Society’s Cambridge Select group and through Sesame, PMS and Legal & General.

Robert McCoy, senior product and communications manager for Sesame Bankhall Group, said: “The Cambridge has been supporting this area of the market for a while, and we are pleased to partner with them on this deal. This 95 per cent LTV mortgage will be welcomed by our members and their customers.”

The initial interest rate is 5.39 per cent, with a £199 up-front fee, another £300 payable upon completion and a free basic valuation included.

Intermediaries can register, submit and complete agreements in principle and full applications through the Cambridge Mortgage Master tool.

They can also use it to generate key facts illustrations and obtain current product and mortgage rate information.

The Society uses the MATS system in the mortgage process, which is designed to make the processing of applications smoother. It also enables intermediaries to receive updates on their cases via text message, email and personalised web pages.

The society has also launched a new range of buy-to-let mortgages, with rates starting at 3.59 per cent for the two-year discounted 75 per cent LTV mortgage, going up to 5.39 per cent for the variable rate mortgage. The maximum loan for these mortgages is £750,000, or £300,000 for the variable rate mortgage.

Reactions

Provider View

Andy Lucas, commercial director at the Cambridge Building Society, said: “We have a commitment to support first-time buyers, and this product – which is available both direct and through intermediaries – demonstrates this.”

Adviser View

Carl Melvin, managing director of Bridge of Weir-based Affluent Financial Planning, said: “The Cambridge is banking on the fact that people will be happy to pay the higher interest rate in order to pay a lower deposit amount to get their foot on the first rung of the housing ladder, and I think that’s a sound view. If the vetting is done properly, a 95 per cent mortgage can carry a very low degree of risk, as a lot of people, especially in the south east, can easily afford the rate but cannot get together the deposit on a lower LTV ratio.”

Charges

The purchase-only mortgage has a £199 fee and a £300 completion fee. The application fees for the buy-to-let range vary from £99 to £199, with a completion fee of £200, £300, 0.5 per cent or 1 per cent.

Verdict

This is an attractive mortgage for those keen to get on the first rung of the housing ladder, as 95 per cent mortgages have been difficult to come by, although more lenders are taking part in the government’s Help to Buy scheme.