This is 0.1% lower rate than the recent HSBC deal, however it does require 50% LTV. I make this the cheapest fee-free 10 year fix I've ever seen. Valuation up to £670 is also free.
Note they also have a 10 year fix at 2.39%, but that carries a £999 fee (see http://www.hotukdeals.com/deals/10-year-fixed-rate-mortgage-2-39-max-50-ltv-999-fee-coventry-building-society-2476340 ). So this product may suit those who have a lot of equity and only need to borrow a relatively small amount, meaning that the impact of a fee would be greater. Full product list here: http://www.coventrybuildingsociety.co.uk/mortgages/remortgaging.aspx
In most cases I suspect 2.39% is the better deal (certainly if borrowing a six figure amount) but I'll weigh up the sums when we buy a house later this year.
Top comments
aravind_svu to pikeybaby
8 Jul 164#12
with brexit anything can happen
pikeybaby
8 Jul 164#11
I've been saying on h.UK.d for years that interest rates are going nowhere for years. History tells you I am right. Japan, with its interest rates at or on zero percent for 20+ years tells you that I am right. Great Britain PLC is bankrupt and a rise in interest rates would send us over the edge. The only way interest rates are going anytime before 2025 is down - you can bank on it, literally
You can't compare with HSBC 10yr deal as LTV is higher, which in most cases is the deal breaker!
HangTime
8 Jul 161#3
I don't see the LTV being different (which I have acknowledged) as rendering a comparison invalid. If you have under 50% LTV, then this is a better option than the HSBC offer.
salsheikh
8 Jul 16#4
the early repayment charges are a lot higher than HSBC's too (a big factor for me)
Yeah if you read the terms for HSBC it is pretty scary:
"An Early Repayment Charge applies to this mortgage until 31/08/2026. The ERC is calculated as 1% of the amount repaid early, above any annual overpayment allowance, for each remaining year of the period during which the ERC applies, reducing on a daily basis.However, (after taking your allowance into account) a maximum 5% of your overpayment will be charged. "
So imagine you took out a 30 year mortgage (fixed for first 10 years) but wanted to repay after 5 years. You'd still owe a sizeable amount because of the long term, yet you'd be liable for 5% of the entire amount being repaid (say £10k on an outstanding £200k balance).
The longer the fix, the more one needs to think about ERC (a lot can change in one's life in 10 years!). I'm only really considering it because in theory(...) our next house should be a long term thing with our son starting school next year, and the fact that we'll only take a 10 year term so even if we did repay early the balance should have reduced significantly by then.
benlondon to HangTime
8 Jul 16#16
more to the point why would you take out a 30 year mortgage to pay it off within 5 years, yes of course sometimes you will get inheritance to pay it off, but this scenario is rare, the HSBC mortgage as with most mortgages, are designed with the average consumer in mind
Daywalker04
8 Jul 16#7
'In most cases I suspect 2.39% is the better deal (certainly if borrowing a six figure amount) but I'll weigh up the sums when we buy a house later this year. '
I totally agree with that, funnily this deal got hot and the other one didn't
marathonic to Daywalker04
8 Jul 161#9
If your outstanding balance averaged £50,000 over the term of the deal, the 0.3% saving per year in the 2.39% product would save you £150 per year, or £1,500 over the term. Taking the £999 fee into consideration, it's about £500 cheaper for such a balance to go for the product with the fee. If the mortgage outstanding is higher, the savings made by going for the fee paying option is more significant.
The reason for this is that a £1,000 fee is nothing in a product with this term - averaging out at £100 per year. Where a 2-year mortgage has a £1,000 fee, it becomes more necessary to do your sums and, usually, anyone with a mortgage of under £100,000 should avoid it.
HangTime
8 Jul 16#8
Yes the other deal should be Hot IMO. This product as more of a niche usage scenario for people with high equity who just need to borrow a small amount. We'll potentially fall into this scenario as currently mortgage free, but looking to upsize. I did a rough calculation and if you aimed to fully repay in 10 years, it would only make sense if you were borrowing under ~£65,000, otherwise better off paying the fee to get the lower rate.
The key thing though is having different options available and identifying the best products for each option.
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Opening post
Note they also have a 10 year fix at 2.39%, but that carries a £999 fee (see http://www.hotukdeals.com/deals/10-year-fixed-rate-mortgage-2-39-max-50-ltv-999-fee-coventry-building-society-2476340 ). So this product may suit those who have a lot of equity and only need to borrow a relatively small amount, meaning that the impact of a fee would be greater. Full product list here: http://www.coventrybuildingsociety.co.uk/mortgages/remortgaging.aspx
In most cases I suspect 2.39% is the better deal (certainly if borrowing a six figure amount) but I'll weigh up the sums when we buy a house later this year.
Top comments
Coventry: 5/5/3/3/3/1/1/1/1/1%
HSBC: 5/5/5/5/5/5/4/3/2/1%
All comments (25)
Coventry: 5/5/3/3/3/1/1/1/1/1%
HSBC: 5/5/5/5/5/5/4/3/2/1%
"An Early Repayment Charge applies to this mortgage until 31/08/2026. The ERC is calculated as 1% of the amount repaid early, above any annual overpayment allowance, for each remaining year of the period during which the ERC applies, reducing on a daily basis.However, (after taking your allowance into account) a maximum 5% of your overpayment will be charged. "
So imagine you took out a 30 year mortgage (fixed for first 10 years) but wanted to repay after 5 years. You'd still owe a sizeable amount because of the long term, yet you'd be liable for 5% of the entire amount being repaid (say £10k on an outstanding £200k balance).
The longer the fix, the more one needs to think about ERC (a lot can change in one's life in 10 years!). I'm only really considering it because in theory(...) our next house should be a long term thing with our son starting school next year, and the fact that we'll only take a 10 year term so even if we did repay early the balance should have reduced significantly by then.
I totally agree with that, funnily this deal got hot and the other one didn't
The reason for this is that a £1,000 fee is nothing in a product with this term - averaging out at £100 per year. Where a 2-year mortgage has a £1,000 fee, it becomes more necessary to do your sums and, usually, anyone with a mortgage of under £100,000 should avoid it.
The key thing though is having different options available and identifying the best products for each option.