12:47 PM, 29th June 2012, About 10 years ago 10
I spent all day yesterday updating the mortgage calculator making sure all the usual little lenders’ tweaks had been uploaded and any interesting new products were included, when I ran across what I think is the Yorkshire tea, or a sliced white loaf of a the buy to let product market.
It is nothing spectacular just a good solid no frills value for money product by Godiva owned by the Coventry building Society. It is a 4.25% variable mortgage, which doesn’t sound exciting, but I will tell you why I like it the same way as my vanilla ice cream.
Godiva 4.25% Flexx mortgage (65% LTV)
4.25% Variable rate for the term of the mortgage
Early repayment Charges – None
Fees – Arrangement a flat £999 and Booking £250
Incentives – One mortgage valuation included up to a maximum of £700 and a remortgage transfer service included
Overall cost for comparison – 4.4% APR
Cost over 3 years interest only for a £100,000 loan not including incentives = £14126.37
What this product offers is a good rate for the whole term of the mortgage and not for a short number of years. Therefore when you look at the costs, which are quite low and flat amounts, you need to remember that there will be no immediate need to remortgage and face all these cost again after an initial discounted or fixed period has expired.
If you remortgage every 2-3 years, as you need to on many other products chasing the best rates, costs will quickly mount up along with increasing the loan size if you add the fees. Therefore if this rate remained competitive, and you were not looking to raise capital by releasing equity, the savings made by not having to remortgage could be substantial.
There are also no Early repayment charges should you change your mind, or circumstances in the future. Along with the extended product term this mortgage gives you a lot of flexibility without being tied in, which in my opinion is worth a lot more than making a potentially expensive mistake.
The risk of this product is that the rate is the lenders own variable and can be changed at any time, so could become uncompetitive in the future. However they also offer a Standard Variable rate with no fees at 4.74% which is still good value and gives a price point at which the Flexx mortgage should remain below. I have also been watching Godiva for a number of years now and they have always offered reasonable value for money in the past with the get out of jail fee card card being no early repayment charges.
This is only a 65% loan to value product and every client has different circumstance that may not fit one lender’s criteria, but I wanted to share what sort of products from years of experience that tend to catch my attention.
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