First Active Low Start Cost deal

futurecut

This deal looks good to me. Am i missing something?

Yr 1: 3.99
yr 2: 5.24
Yr 3 : 5.24
rest : 5.74

Fee is £399, £195 early charge during term and 2% of value of first three years repayments.

Am interested in low initial costs but will the deal lose it's shine after the discount?

5.74 after the initial three years looks ok. I know others that used FA and like them, but they both went interest only for first two years and i'm not sure thats a great thing?

Or maybe just better to go for a standard FTB 2yr discounted?

Any opinions valued, Thanks!

herbiesjp

As with any scheme, it depends on personal circumstances.

You have not really given too much to go i.e. in relation to figures.

I think that there are probaably other schemes out there that generically look more appealing than the FA scheme.

It does depend on what you are looking for however, and whether you meet a lender's criteria.

MarkyMarkD

That isn't particularly attractive.

It depends if you want something which is OK value over the 3 years you are tied in for (in which case you can get better) or something with a long-term good value rate.

For example, over 3 years, you could pay:

3.84%, 3.84%, 6.00% = total 13.68%.

Your deal is 3.99%, 5.24%, 5.24% = total 14.47% = 0.79% more.

The deal I refer to is A&L's 2 year low start discount with a 1 year additional tie-in at BBR+1.25%.

Fee is the same (£395), RAC is £295 (£100 more) - so the break-even depends on the size of the mortgage you want.

There's also time value of money benefits in getting the low rate up-front and paying the higher rate later - but that's nit-picking.

For people wanting to keep down their costs in the first two years, it's a better way of doing it than paying interest only at the start - which is a way of pretending you are saving money, rather than ACTUALLY saving money.

Food for thought, maybe?

I am about to switch my mortgage to this particular deal which is why I am keen on it!

futurecut

MarkyMarkD,

I'm an Asbestos Surveyor and A&L is one of our clients, so i've visited lots of Scottish branches over the last year. Every time i was in a new branch they would try to have me apply for the premier plus current account. In the end i did apply as it was good at time. However i was rejected and they tried to palm me off with the current account with poorer features than my current current account.

Anyway i appealed but they never would tell me why i'd been rejected. I was peeved as i've no credit problems at all. I tried again six months later and was rejected again.

If they wouldn't give me a high interest current account i doubt very much if they'd give me a mortgage! The whole episode turned me off A&L though i found branch staff nice enough.

They are under tremendous sales pressure and personally lose out when leads don't turn into sales.

I'll do a bit more digging for now-thanks!

MarkyMarkD

OK - sorry to hear of your bad experience, and you're probably right that it isn't worth applying to them for a mortgage. I've got Premier Plus too - I'd have been most peeved to be fobbed off with a standard current account, too.

derbyjo

Futurecut, A&L also turned the boyf and I down for the premier account, so we appealed to the underwriters and have now been accepted, it may be worth appealing?