Alliance and Leicester mortgage.. Too good to be true?

andrewm1981

Hi,

I'm in a bit of a daze as this all seems too good and easy... What's the catch?!

I took a £125k mortgage 9yrs ago with A&L on a 17yr term This reverted back to 0.5% above base about 7 yrs ago.

I now want to get a bigger mortgage and include my girlfriend. So I called up the Santander number for existing A&L customers to speak to them. Spoke to a friendly guy, who asked what we earned, and our outgoings were, and what we wanted to borrow. Turns out £240k was fine using the £52k I've paid off, meaning property of £290k was within reach. So far, exactly what I thought.

I asked about porting, as I didn't want to lose the 0.5% above base for the existing mortgage. He said that I could have the entire mortgage on 0.99% above base! for the full term of 25 years?!

What?!?!

He go through any details, just ran through how much the payment would be (£500 less than I thought per month) and that the next stage should be to find a property, put an offer in, have it accepted, then call back and they'd book me in for the proper 2 hr phone interview where they run credit checks and all.

Does this sound right to you? Why so cheap? Is there some legal obligation to offer cheap rates to existing A&L customers that I don't know about? And is the process that he described right? The guy sounded friendly, but also a bit laid back, almost like it was his last day or something!!

Thanks in advance

From a dazed Andrew :-)

kingstreet

Somehow, some A&L mortgages not only have the option to port, but also have the option to borrow more at the same rate.

I don't know how it happened, but I'm sure if they could get out of it they would have done so by now.

Don't forget, that rate won't look half as good when the BoE rate starts to rise again, so keep your eye on fixed rate options...

andrewm1981

Appreciate the quick reply kingstreet :-)

I know my old mortgage was definitely portable, but at 0.49 not 0.99 above base. Still, I'm not complaining at this rate, that's for sure.

So does the process that he said seem right? At what point do I find out about the details like overpayments/product fees etc?! All seems too chilled!!

kingstreet

Ask them to provide you with a Key Facts Illustration, or KFI for short. You should automatically be provided with this before you are expected to make a commitment to a mortgage and pay any required fees.

This contains all the terms and conditions, rates, fees, monthly payments etc.

I've just realised I mis-read the OP. It's currently base + 0.5% and they are offering the total amount on base + 0.99%? That's not what I've seen before and I would recommend requesting a KFI for this immediately...

Thrugelmir

andrewm1981 wrote: »

I asked about porting, as I didn't want to lose the 0.5% above base for the existing mortgage. He said that I could have the entire mortgage on 0.99% above base! for the full term of 25 years?!

You may well find that the underwriters aren't so generous when you submit the full application. The guy on the phone is unlikely to be a mortgage expert.

andrewm1981

Thanks for your tip king street, I called them straight back but they said I had to go back with an accepted offer, and then they would go through the key facts illustration?!

It was the mortgage line I phoned, so I hope he knows at least the basics of what's going on!!

Moby_Tide

I think they are just running down the A&L book anyway they can. Certainly didn't get as good a deal but was given a rate reduction and waived £4k early repayments if I moved on to Santanders book last month

claire80

We have jut ha our offer from
Santander . We were on a&l 0.99 above base rate they have Porte ours and our additional borrowing of an additional 130k so 210k in total and kept the 0.99 rate .
At the application stage thy explained products and sent us the key facts and details etc . We can do all the stuff we could on our a&l overpay etc

No problems with underwriters etc took 4 weeks from initial phone
Call

Hth

Thrugelmir

Moby_Tide wrote: »

I think they are just running down the A&L book anyway they can. Certainly didn't get as good a deal but was given a rate reduction and waived £4k early repayments if I moved on to Santanders book last month

Santander are using this as a way of reviewing customers they wish to retain as well.

Anastasia

I spoke to Alliance and Leicester today to ask about new rates. I have a part interest only on 1.25%, 0.75% over base rate, and part repayment 4.24%. I was thinking about fixing the repayment part for 5 years.

They offered me a lifetime tracker for the repayment part the same rate as the interest only so it will all be 0.75% over base rate. No fees - she said they were waiving them for loyalty. No tie-in. No restriction on overpaying. Portable. The mortgage will move over to Santander. At anytime I can choose another product for the repayment part only. I checked everything as I read this post last night when I was researching my options. I was so surprised and it suits me perfectly as I want to overpay as much as possible. My payments will go down by £74/month. I've been with them for 20 years.

Stroller133

We are due to complete with a Lifetime Tracker of BOE + 0.99% for the ported portion and an extra £50k in 5 weeks time. We couldn't believe it either and despite several calls and the advisors telling us on every call, I didn't really believe it until the offer came through.

If its the same as us, the new product is the flexible offset. Its not a current account like First?, but a linked savings account where the balance is offset - perhaps at 1.49% it might be better to save elsewhere, but I think you can withdraw at any time.

Also I think your initial loan amount is like credit limit, and subject to cirmcumstances I think you can increase the loan back up to to the limit, but obviously the repayments go up as the term is fixed.