New Goldfish offer 3.9% until 2010 with 3% fee

[Deleted User]

As title really, low rate expires July 2010. Approx cost is 15.5% over 3 years (1.03*1.039^3 -1) ie approx 4.9% pa for the three years so may appeal to some with debt / offset mortgage. This ignores repayments.

On goldfish site unless Martin has an affiliate link?

The_Boss

I'm confused - so with the 3% fee, it effectively works out as 15.5% apr per year over 3 years?

GeorgeUK

I'm confused too - but i think he's saying it's 15.5% in total for 3 years - not 15.5% per month... maybe

The_Boss

Oh, I am just being stupid. 15.5% is the total over 3 years, not annually. My mind is slow today and its been a while since I've been on this board. Its all coming back to me now though.........

[Deleted User]

Sorry if this wasn't clear - 15.5% is the cost over the whole 3 years which breaks down as 4.9% per annum.

Milarky

According to https://www.whatsthecost.com £1000 borrowed (£1030 debited) would require equal payments of £30.37 to clear the account over 3 years. That's a total of £1093.27 (so the interest is only £63 or so.)

Plugging in '£1000' as the amount borrowed and using payments of £30.37 but adjusting the interest rate until this would equal £0 in the same period gives an annual rate of 5.87% instead.

Of course you don't have to repay at that rate - but it does illustrate the true cost of the deal. The reason '3%' does not add '1%' to rate is that the average balance is about 50% of the initial amount - so it's more like 'plus 2%' on the advertised rate.

The_Boss

anactuary wrote: »

Sorry if this wasn't clear - 15.5% is the cost over the whole 3 years which breaks down as 4.9% per annum.

Oh, it was very clear. I was just being a bit thick. Who are Goldfish backed by? I think I'm going to apply for this in a month's time.

Luke

Morgan Stanley. They actually used to have this deal before they switch over to Goldfish.

The_Boss

Hmm - not sure whether I should go for this or the M&S since I have had a long history of rejections without any good reason.

[Deleted User]

Milarky wrote: »

According to www.whatsthecost.com £1000 borrowed (£1030 debited) would require equal payments of £30.37 to clear the account over 3 years. That's a total of £1093.27 (so the interest is only £63 or so.)

Plugging in '£1000' as the amount borrowed and using payments of £30.37 but adjusting the interest rate until this would equal £0 in the same period gives an annual rate of 5.87% instead.

Of course you don't have to repay at that rate - but it does illustrate the true cost of the deal. The reason '3%' does not add '1%' to rate is that the average balance is about 50% of the initial amount - so it's more like 'plus 2%' on the advertised rate.

My view is that with a promotional rate like this, you would be unlikely to pay it off uniformly over the 3 years. Indeed unless you had no borrowings elsewhere, you'd probably be illadvised to do so. Hence the 4.9% is more realistic, but people should consider their own circumstances when making any comparisons with other deals / scenarios.