Coventry Building Society has launched a new range of loans featuring a 1.79 per cent variable rate for loans-to-value (LTVs) of up to 65 per cent on its Flexx for Term flexible mortgage product.
There is a £199 booking fee and £300 arrangement fee, but no early repayment charges.
It is also offering a 1.89 per cent fixed rate deal until 31 December 2016 for LTVs of up to 65 per cent, with a £199 booking fee and a £300 arrangement fee, and early repayment charges payable until 31 December 2016.
But a potentially more attractive package comes in the form of a 3.29 per cent fix until 31 December 2019 for LTVs of up to 80 per cent. There is a £199 booking fee but no arrangement fee. Early repayment charges apply till the end of the term.
Early repayment charges on two year fixes are 3 per cent until 31 December 2015, then 1 per cent until 31 December 2016. Five-year fixes have an early repayment charge of 5 per cent until 31 December 2016, 3 per cent until 31 December 2018, then 1 per cent until 31 December 2019.
Provider View
Darin Landon, distribution director, Coventry Building Society, said: “Our latest range has something for everyone. We have highly competitive mortgages including Flexx for Term and Fixed rate options.
“With rates starting from just 1.79 per cent and selected mortgages with no arrangement fees, our new range should be very popular. And as always, all residential products include a valuation of up to £670 and access to our remortgage transfer service.”
Adviser View
Mike Richards, London-based mortgage adviser at Mortgage Concepts Associates, said “There are not too many flexible mortgages about like this, allowing borrowers to overpay alongside other features. The idea is that you overpay when rates are this low. However, the recent speculation on base rate increases point to 2016, so I think they are looking to get people in while they can. I think they reckon that rates will remain low and they can get people comfortable with the product and will not move even if the rate increases. Or if they do move, they are more likely to go to a fixed rate at the society.
“Although 1.79 per cent is a good rate, and the 1.89 per cent two-year fix is good as well, I would go for a five-year fix. Currently Accord has a five-year fix at 2.79 per cent for LTVs of up to 65 per cent. But the 3.29 per cent five-year fix from Coventry for LTVs of up to 80 per cent is fantastic.”
Charges
£199 booking fee, £300 arrangement fee.
Verdict
The variable rate deal’s attractions depend on just how much the rate will rise from its current low level. It is not a tracker, so the society is not limited to raising rates in relation to a base rate rise, whenever that may be.
Fixing for as long as possible does provide more comfort. So the five-year fix stands out both in terms of the attractive 80 per cent LTV limit and the fact that there is no arrangement fee.
