MortgagesJul 30 2015

Monmouthshire shows preference for locals

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Monmouthshire Building Society has launched a new range of two-year residential buy-to-let and remortgage products.

The Newport-based lender offers two-year discount house purchase mortgages for first-time buyers and home-movers at 1.65 per cent up to 80 per cent LTV with an £845 product fee. The product is available for house purchase in England and Wales.

For those living in Monmouthshire’s locality, defined as postcode areas NP, CF, SA, LD, WR, GL, HR and BS, the mutual is exclusively offering mortgages of up to 95 per cent LTV at 3.75 per cent interest.

A two-year buy-to-let purchase discount mortgage is available at 2.65 per at up to 75 per cent LTV.

The rate applicable at 60 per cent LTV is 2.05 per cent. Both deals come with £399 product fees.

For customers looking to switch their mortgage from another lender, the range of two-year residential buy-to-let remortgage discount products comes with free standard valuation and free legal fees through the lender’s nominated solicitor.

The product range includes a two-year discount remortgage product at 1.90 per cent at 80 per cent LTV available throughout England and Wales with an £845 product fee.

A rate of 2.75 per cent is applicable at 90 per cent LTV, available in the society’s vicinity only, with no product fee.

A two-year buy-to-let remortgage discount loan is available at 2.95 per cent at 75 per cent LTV, while the rate for a two-year fix at 60 per cent LTV is 2.15 per cent. Both loans also come with £399 product fees and are only available in the society’s local area.

The aforementioned product fees can be added to the loan.

Provider view

Commenting on the buy-to-let deals, Monmouthshire’s head of lending procurement Colin Strong said: “The society has an enviable reputation for offering value for money buy-to-let products, and this new range is no exception. The combination of low product fees, competitive interest rates and the added benefit of a free valuation and legal fees in some cases, means that these products will prove very attractive to buy-to-let landlords.”

Adviser view

Speaking about the two-year discount house purchase mortgage at 1.65 per cent up to 80 per cent, John Stirling, chartered financial planner at Walden Capital, based in Essex said: “That is very good indeed. It is extremely competitive in the current market.”

On the fee-free remortgage at 90 per cent LTV, he added: “The deal is good for small loans but those seeking a higher-value loan will probably be better off paying a product fee for the sake of a lower rate of interest.

“Small building societies need to restrict their offerings initially. Restricting a competitive loan to an area local to its geographical location is a good thing and will help Monmouthshire be viewed positively in its local community.”

Charges

Charges range from £0 to £845.

Verdict

Monmouthshire Building Society is a classic example of a small lender aiming to steal business from the household name lenders. The lender appears to acknowledge that offering competitive products to the mass market is not a sustainable option. Restricting some deals to those who live close to its headquarters will undoubtedly improve the society’s public perception in its community.