Mortgage Round Up

Welcome to our regular update on Mortgages.

Mortgages and Mortgage deals are constantly changing and so should you be interested in a obtaining an arrangement, getting the right deal is vital.

Here at Box Financial Planning, we are here to help ensure you get the right Mortgage, Home Purchase Plan or Equity Release for you.

This week, we are looking at several different mortgages and Home Purchase Arrangements. 

The following information should not be taken as a recommendation and all arrangements are subject to status.

All mortgages are based on a Property Value of £300,000 and a loan to value as indicated and highlight some of the better deals currently available!

Type Initial Rate Fixed/Discount Period Loan to Value Arrangement/Booking Fee Final Rate
Buy to Let - Tracker* 2.75% 2 Yrs 75% £1,995 4.50%
Buy to Let - Fixed* 3.10% 2 Yrs 75% £1,995 4.99%
Buy to Let - Fixed* 2.79% 2 Yrs 75% £2,625 5.99%
Buy to Let - Discount* 4.89% 2 Yrs 85% £3,825 6.58%
Buy to Let - Fixed* 4.50% 2 Yrs 80% £3,600 5.35%
Home Purchase Plan (Sharia Compliant) - Fixed* 4.19% 1 Yr 80% £399 4.49%
Home Purchase Plan (Sharia Complaint) - Discount* 3.59% 1 3/4 Yrs 65% £399 4.49%
Retirement Mortgage - Fixed *&** 4.75% 5 Yrs 40% £995 4.60%
Lifetime Mortgage  Fixed** 6.05% - 10% £1,145 6.05%

Details correct as at 09/09/14

Some of the above mortgages include additional features such as ‘Cash Back’ on completion or free valuations.

For Buy to Let investors, costs and rates significantly rise above 80% Loan to Value, so budding ‘Buy to Let’ investor should aim for at least a 20% deposit and ideally 25%.

Home Purchase Plans are often the basis for Sharia Complaint arrangements and therefore are suitable for Islamic arrangements.

Retirement and Lifetime Mortgages (along with Reversionary Schemes) are only available for those over the age of 55 and are generally suitable for those retired individuals seeking to release capital from their home. Due to the longer term nature of these arrangements, the costs can be higher than a comparable normal mortgage.

In addition to the Arrangement/Booking Fees, there will be other costs such a Legal and Valuation costs as well as any agreed advice fees (our normal fee is 0.35% of the transaction Value although we do have some special deals on at the moment which may reduce this and some lenders may pay a procuration fee, which will cover some or all of this fee) which will therefore also need to be paid.

As a reminder, the initial rate is not necessarily the most important rate and therefore all three aspects (Setting up Costs, Interest Rate and Final Rate) and your personal situation needs to be taken into account, to ensure you end up with the most appropriate debt related product.

Our initial meeting/discussions are without charge or obligation, so please contact us should you wish to avail yourself of our whole of market, Mortgage, Home Purchase Plan and Equity Release review service.

Next time, we will be looking at borrowers wishing to move home.

Interest rates can rise as well as fall and the post Discount/Fixed Periods may be higher or lower than stated.

*The property may be repossessed if you do not keep up repayments on your mortgage or Home Purchase plan secured on it.

**This is a Lifetime Mortgage. To understand the features and risks, ask for a personalised illustration.