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  • FIRST POST
    sophieev
    Coventry - Flexx for term
    • #1
    • 17th Feb 15, 3:43 PM
    Coventry - Flexx for term 17th Feb 15 at 3:43 PM
    Hi

    This is another of the products I have been looking at when considering remortgaging.

    They have a variable rate for the term, currently at 1.89% which is attractive (at the current rate).

    It appears to be the same as a lifetime tracker in that there are no early repayment charges etc., the difference being that unlike a tracker it is not pegged to the BOE base rate. In fact, there appears to be no objective yardstick at all - they can raise the rate to what they want, when they want.

    I have not really looked at this kind of product before but it does ring alarm bells for obvious reasons, despite the fact that they have told me over the phone that they have never in the past increased one of these rates.

    Does anyone have any thoughts on this kind of variable rate mortgage ? Terrible idea ?
    Like I said, it is not really something I have come across before and it seems a bit odd to me.
Page 1
    • amnblog
    • By amnblog 17th Feb 15, 5:47 PM
    • 9,752 Posts
    • 3,768 Thanks
    amnblog
    • #2
    • 17th Feb 15, 5:47 PM
    • #2
    • 17th Feb 15, 5:47 PM
    Some lenders offer variable rates rather than base rate linked tracker ones.


    Since they can control the rate they can afford to stay competitive.


    The security you have is their history of not profiteering through raising the rate.


    It is a good product for the right borrower.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • sophieev
    • #3
    • 17th Feb 15, 7:07 PM
    • #3
    • 17th Feb 15, 7:07 PM
    Thanks a lot for your reply.
    So it seems like you are saying that (on past performance at least) they are unlikely to simply raise the rate unless the BOE base rate rises and/or the banks face another cost of funding crisis (which may not be linked to base rates) ?

    I am looking at this versus a First Direct base rate tracker. There is a difference of just 0.1% in the rate (in favour of the Coventry mortgage) and all things being equal I would probably opt for the Coventry mortgage.

    It is just the first time I have considered something like this and I suppose I have a general aversion to signing up to a contract that says to the other party "you can do whatever you want". I am, perhaps, overly suspicious !

    Thanks again
  • sophieev
    • #4
    • 19th Feb 15, 2:15 PM
    • #4
    • 19th Feb 15, 2:15 PM
    Does anyone else have any info as to whether Coventry have historically only raised rates on their flexx products in line with base rate increases ?

    I am struggling to find much info on this (and the Coventry website is quite light on info too).

    Thanks
  • tbash
    • #5
    • 4th Jun 15, 2:18 PM
    • #5
    • 4th Jun 15, 2:18 PM
    Hi, so what did you all decide. The draw for me sticking with coventry is that I dont need to pay for another house valuation. however they dont seem to have the best rates and they dont track the BoE rate. There Flexx for term literature has no clear definition on how its derived.

    So do I take the risk and pay just 300 for a nice 1.99 rate which may only last 6 months by limiting myself to Coventry do I pick the next best thing which is a fixed deal of 2.39 with a 999 fee.

    In both cases I pay less per month anyway and am able to accommodate rate increases its just historically how does Coventry treat this rate.

    Did anyone go for this 1.99 deal.
    • silvercar
    • By silvercar 4th Jun 15, 3:30 PM
    • 35,890 Posts
    • 151,108 Thanks
    silvercar
    • #6
    • 4th Jun 15, 3:30 PM
    • #6
    • 4th Jun 15, 3:30 PM
    I have a base rate tracker, so they do have some products that do just that, though I wouldn't know if they are offering any at the moment.

    In my mind an extra 0.4% plus a fee that is 699 higher is not attractive, but it depends how secure you want to feel.

    Historically Coventry are good guys, but they have just reduced their savings rates on old ISA products (as have a lot of others to be fair).
    • sandspider2000
    • By sandspider2000 23rd May 16, 12:19 PM
    • 129 Posts
    • 29 Thanks
    sandspider2000
    • #7
    • 23rd May 16, 12:19 PM
    • #7
    • 23rd May 16, 12:19 PM
    Just to add to this, I wondered if anyone had any new comments on Coventry Flexx for Term mortgages? Their current rate is 1.75% for lifetime (variable, of course) with a £999 fee. But when compared to the best 5 year fix at around 2% plus around £2000 fees (HSBC) or even 2.49% from First Direct (no fees and a better reputation I think) the Flexx for Term looks quite attractive, especially if Coventry don't have a history of hiking rates for the sake of it. Does anyone have any experience with a Flexx for Term mortgage from Coventry?

    Thank you.
    • amnblog
    • By amnblog 23rd May 16, 1:09 PM
    • 9,752 Posts
    • 3,768 Thanks
    amnblog
    • #8
    • 23rd May 16, 1:09 PM
    • #8
    • 23rd May 16, 1:09 PM
    Coventry have too much of their business on these type of products for it to make business sense to take liberties.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Spangled
    • By Spangled 23rd May 16, 1:27 PM
    • 176 Posts
    • 72 Thanks
    Spangled
    • #9
    • 23rd May 16, 1:27 PM
    • #9
    • 23rd May 16, 1:27 PM
    Just to add to this, I wondered if anyone had any new comments on Coventry Flexx for Term mortgages? Their current rate is 1.75% for lifetime (variable, of course) with a £999 fee. But when compared to the best 5 year fix at around 2% plus around £2000 fees (HSBC) or even 2.49% from First Direct (no fees and a better reputation I think) the Flexx for Term looks quite attractive, especially if Coventry don't have a history of hiking rates for the sake of it. Does anyone have any experience with a Flexx for Term mortgage from Coventry?
    Originally posted by sandspider2000
    I saw that too. On the face of it, it looks pretty good. That said, you're comparing a lifetime variable rate with a 5-year fix, which is a bit of an apples and oranges comparison.

    I would compare the Coventry deal against existing lifetime trackers. The best I can see (as a layperson) is HSBC's BR+1.49% lifetime tracker (£999 fee), which gives a pay rate of 1.99%. Higher than the Coventry rate but at least with the HSBC one you are guaranteed to track the Base Rate.

    HSBC *did* have a BR+1.29% lifetime tracker available just last week (which I was tempted by myself when I come to remortgage later this year) but it seems to have disappeared from their website so is maybe not offered any more...

    Good luck!
    • Fran61
    • By Fran61 4th Oct 16, 11:05 AM
    • 5 Posts
    • 5 Thanks
    Fran61
    This is the mortgage I am going for and I reckon it's a good deal. Interest rates do NOT look like they'll be going up any time soon. If and when I choose to change products it's going to be on my timeline not theirs. I won't automatically be put in a situation where I need to pay arrangement fees again in a couple of years time. The overall cost - i.e. full term interest rate is very low (2.3%) so to me this looks like a good deal that puts me in control. The fixed rate mortgage market is predicated on fear of sudden interest rate hikes which haven't been happening for a good long time and now the deputy governor of the bank of England is saying they'll probably never happen. That's why I'm going for something I can get out of without penalty if an even cheaper deal comes up.
    I've got experience with going for tracker mortgages having had one for the past 15 years and I'm glad I did as interest rates have gone steadily downward the entire time and I've not had to rearrange my mortgage in all that time to stay on a cheap rate. In fact it's a laughably cheap rate which I'm only sorry I can't keep hold of because of divorce.
    • SavingSteve
    • By SavingSteve 4th Oct 16, 12:01 PM
    • 482 Posts
    • 206 Thanks
    SavingSteve
    This is the mortgage I am going for and I reckon it's a good deal. Interest rates do NOT look like they'll be going up any time soon. If and when I choose to change products it's going to be on my timeline not theirs. I won't automatically be put in a situation where I need to pay arrangement fees again in a couple of years time. The overall cost - i.e. full term interest rate is very low (2.3%) so to me this looks like a good deal that puts me in control. The fixed rate mortgage market is predicated on fear of sudden interest rate hikes which haven't been happening for a good long time and now the deputy governor of the bank of England is saying they'll probably never happen. That's why I'm going for something I can get out of without penalty if an even cheaper deal comes up.
    I've got experience with going for tracker mortgages having had one for the past 15 years and I'm glad I did as interest rates have gone steadily downward the entire time and I've not had to rearrange my mortgage in all that time to stay on a cheap rate. In fact it's a laughably cheap rate which I'm only sorry I can't keep hold of because of divorce.
    Originally posted by Fran61
    First boldened comment : very true, ability to switch away if the product becomes uncompetitive is crucial. Especially as this is not a tracker, it is a variable. So Coventry can choose to change it any time they like. They don't have a history of changing it off the cuff, but they can.

    Second boldened comment : the market is very much near the bottom. Not saying a variable is a bad thing, but your experience of the last 15 years is unlikely to be the same as the next 15.
    • Waldorf Statler
    • By Waldorf Statler 4th Oct 16, 2:20 PM
    • 65 Posts
    • 61 Thanks
    Waldorf Statler
    I recently switched to this product and was pleasantly surprised to see the latest rate cut passed on to the variable rate. Of course, they will just as quickly pass on any increases but it was an unexpected bonus.
    • RhysHSCC
    • By RhysHSCC 6th Oct 16, 11:09 PM
    • 75 Posts
    • 28 Thanks
    RhysHSCC
    The Coventry haven't increased the rate on their variable rate mortgage sincr approx 2007, and immediately passed on the recent cut to EE and existing borrowers
    Mortgage co-ordinator for a building society

    I carry out affordability assessments for new and existing customers.
    I update customers during the application when they call, letting them know where things are at.
    I also answer existing mortgage queries.
    • getmore4less
    • By getmore4less 7th Oct 16, 7:07 AM
    • 29,801 Posts
    • 17,818 Thanks
    getmore4less
    I saw that too. On the face of it, it looks pretty good. That said, you're comparing a lifetime variable rate with a 5-year fix, which is a bit of an apples and oranges comparison.
    Originally posted by Spangled
    As long as you understand the parameters and assumptions you can do valid comparisons.

    with a fix against a variable you can start with the period of the fix and assume the variable rate won't change.

    If the variable rate comes out best you can then analyse the rate rises that would result in break even.

    With a set of scenario you can assess.
    Tracker can be the risk adverse option people make the fatal error of assuming fixes are low risk when in many cases with proper analysis they can be the higher risk option.

    Then consider the softer variables like, will you move, how much can you pay, overpayment limits, no need to change again as long as the rate remains competitive, portability job security, income projections(like maternity)...

    Low margin trackers/variable(<+2%) have been a good choice for years, those that switched to the <+1% have not looked back and even when(if) rates rise they probably won't need to switch unless looking at very good long term(10y) rates.

    until recently switching off the Nationwide +2% was something people were generally advised to consider very carefully unless really needed, now there are better options those that don't need the other benefits of BMR could consider a switch to a lower margin variable.
    • JerryF
    • By JerryF 20th Apr 17, 3:50 PM
    • 15 Posts
    • 12 Thanks
    JerryF
    We've used the BTL Coventry / Godiva Flexx products for a number of years, changing products as the rates decrease (and as the equity in the property increases). We were nervous initially that the terms do not specify what the Flexx tracks, and that it is sold as a variable rate. In reality it has tracked the BOE base rate, and in August 2016 when the BOE cut rates by 0.25% to 0.25% the Coventry Flexx rate dropped 0.25% too. We are about to take a new Flex product 1.59% 50% LTV with a high £1999 fee based on this past experience (moving down from 2.54 Flexx) The monthly interest cut will pay for the £1999 fee after 20 months, and then the interest saving will continue for the 19 years term saving in excess of £20k over 19 years. The fee can be added to the loan, but we'll probably pay it now rather than borrow it.
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