10 year fee-free fixed mortgage 2.69% @ Coventry BS
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10 year fee-free fixed mortgage 2.69% @ Coventry BS

25
Found 8th Jul 2016
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 hotukdeals.com/dea…340 ). 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: coventrybuildingsociety.co.uk/mor…spx

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.
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the 2.39% deal was posted yesterday.
You can't compare with HSBC 10yr deal as LTV is higher, which in most cases is the deal breaker!
Original Poster
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.
the early repayment charges are a lot higher than HSBC's too (a big factor for me)
salsheikh

the early repayment charges are a lot higher than HSBC's too (a big … the early repayment charges are a lot higher than HSBC's too (a big factor for me)



They're higher with HSBC:

Coventry: 5/5/3/3/3/1/1/1/1/1%
HSBC: 5/5/5/5/5/5/4/3/2/1%
Original Poster
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.
'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
Original Poster
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.
Daywalker04

'In most cases I suspect 2.39% is the better deal (certainly if borrowing … '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



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.
Banned
dammit

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
pikeybaby

I've been saying on h.UK.d for years that interest rates are going … 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



​with brexit anything can happen

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
still on my HSBC 0.79% tracker rate... they will be paying me soon if rates go down ?! ..joke btw
Holdddddd until next week at least. There is a good chance bank of England will announce cutting the base rate slightly.
HangTime

Yeah if you read the terms for HSBC it is pretty scary:"An Early … 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.



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
While this is a good deal, please note that Coventry are one of the lowest risk lenders and have stricter conditions in general, for my application additional payments and bonus' being part of your "monthly wage" was an example. They only took into account 25% of my additional pay for sleeping in at work despite it being contracted, whereas HSBC took 60% of it into account. They also had the lowest multiple of our household wage, which was less than x2. This priced me out of a 60% offset mortgage with them.
i'll stick to my barclays base rate +0.47 rate for now. But hot deal for 10yrs, gives certainty in an economically uncertain time
How to apply for it?
Me & the Mrs have dealt with The Coventry and found them good. I suspect that HSBC is more of a one size fits all lender. For example, we spoke to HSBC before about a mortgage and found their income requirements ludicrous.
We're going to see more of these great deals soon as the BOE's Brexit liquidity tsunami hits the banks.
pikeybaby

I've been saying on h.UK.d for years that interest rates are going … 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


Agree, I can only think of 2 reasons to have a base rate above zero, to cool an overheating economy or to artificially defend your currency to boost its value. Neither are gonna happen any time soon.
arjun311

Holdddddd until next week at least. There is a good chance bank of … Holdddddd until next week at least. There is a good chance bank of England will announce cutting the base rate slightly.



Not exactly. Carney said they will be assessing things at the July meeting with a view of acting in August.

I agree that waiting is the right thing to do right now but I'm not entirely sure a rate cut is coming. The langauge from the BOE has been such that they may look at more tinkering type policies like QE or the funding for lending scheme. There was a reason why they didn't cut rates below 0.5% through the crisis and that was to leave themselves some margin for any big shocks. Despite Brexit being a big event, the effects of it will come out over time, not after 5 minutes, thus it's not the big shock they'll need to immediately cut rates for.

I'm not ruling cuts out but am of the view they'll be a last resort option.
pikeybaby

I've been saying on h.UK.d for years that interest rates are going … 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



Should I start overpaying my mortgage now or wait until the rates drop? (Which I believe is inevitable)
Gordinho

Should I start overpaying my mortgage now or wait until the rates drop? … Should I start overpaying my mortgage now or wait until the rates drop? (Which I believe is inevitable)



If looking to overpay, doing it sooner is better than later regardless of your current rate. Assuming no charges of course.
vod

If looking to overpay, doing it sooner is better than later regardless of … If looking to overpay, doing it sooner is better than later regardless of your current rate. Assuming no charges of course.


Nationwide BMR, am I correct in saying that the higher the mortgage rate the greater the saving is if you overpay?
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