2% four year discount mortgage

adyfox

Been looking at the 2% four year discount with Barnsley B.S. Small mortgage to switch, K54.5, over 19 yrs. There's £325 cashback and an early repayment fee if within four years (but who cares at that rate). Asked them about increased/lump sum payments and they said essentially there were restrictions but 'head office never enforce it'.
All seems very glossy and can't see any real catches on the face of it (given the amount), anyone know of any hitches.

herbiesjp

adyfox wrote:

there were restrictions but 'head office never enforce it'.
All seems very glossy and can't see any real catches on the face of it (given the amount), anyone know of any hitches.

I would be wary of this off the cuff quote if it would be an important feature to you to overpay - get them to put that in writing - otherwise you could be caught short

meanmachine_2

adyfox wrote:

Been looking at the 2% four year discount with Barnsley B.S. Small mortgage to switch, K54.5, over 19 yrs. There's £325 cashback and an early repayment fee if within four years (but who cares at that rate). Asked them about increased/lump sum payments and they said essentially there were restrictions but 'head office never enforce it'.
All seems very glossy and can't see any real catches on the face of it (given the amount), anyone know of any hitches.

One of the deals on offer is a rate of 1.7% !!!!

Can't see how they can make those stats add up, can you?

Surely there must be some kind of catch to offset such a low rate....

adyfox

...yeah, suppose what they get is virtually guaranteed payments for four years. Gonna have a chat and try and get written confirmation on the increased payment thing. Didn't see the 1.7% deal so will enquire and post further info. Thanks.

SUPERLOOPY_3

Those 'lower' rates specifically say between 75-95%, in my case i've got 45k to shift, rate of 2% - 2.2% looks appealing but are there really no tie-ins after the four years?? I was looking at 5 or 10 year fixed, maybe this is a runner ..

Kellm9

adyfox,

Seems like a great find. I have been looking for a good deal for a remortgage. This could be it. However the numbers do seem too good to be true. I cannot find any other lenders getting close to this deal. I think I will have to enquire further with the BS.

Regarding overpayments / lump sums etc I have copied the note below from Barnsley BS website. The second paragraph seems to cover the lump sums and explains the penalties.

"Early Repayment Charge

An early repayment charge is payable if you repay this mortgage within the first four years, equivalent to the monetary value of the benefit received.

A part redemption of less than 25% during the first four years, does not attract a charge but where a repayment takes the amount owing to less than 75%, a charge will be applied on the percentage over the 25% limit, equivalent to that portion of the benefit received."


:think: So I read it that you can overpay up to 25% without any penalty.

Regards
Kells

EDIT:- ARRRRRgggh just spotted, really only for Central/East England, Yorks, Lancs, Derby, Lincs, Humberside Etc. I'm in Scotland :mad:

[font=Arial, Verdana, Helvetica, sans-serif]The following mortgages are available to new borrowing customers applying direct, through Society Branch Offices only and are not open to intermediaries or brokers. In many cases, mortgage offers are only made on property which falls within our area of operation. For further clarification, please refer to this map.[/font]


Kells -- still searching for a good remortgage deal.

YorkshireBoy

I think you've been a victim of "creative marketing". The 2% you mention refers to the amount of discount given - not the rate for repayment!

I suspected it was "too good to be true", mainly because I couldn't find any worked examples on the Barnsley BS web site, so checked https://www.moneyfacts.co.uk for further information.

My suspicions were proven - in your example, the "2%" figure relates to the discount from SVR, and gives a rate payable of 4.74%.

meanmachine_2

YorkshireBoy wrote:

I think you've been a victim of "creative marketing". The 2% you mention refers to the amount of discount given - not the rate for repayment!

I suspected it was "too good to be true", mainly because I couldn't find any worked examples on the Barnsley BS web site, so checked https://www.moneyfacts.co.uk for further information.

My suspicions were proven - in your example, the "2%" figure relates to the discount from SVR, and gives a rate payable of 4.74%.

Doh!

So not only do you have to be in their catchment area, you have to be gullible too.

Stupid lenders. The wording on their website is HIGHLY suspect if you ask me.

MarkyMarkD

I was going to say:

It's pretty obvious, really, that a 2% 4 year discount is the amount of the discount, not the payable rate! But that's STILL a good discount, particularly with the 25% overpayment allowed as noted.

but after a brief look at the Barnsley's site, I can't help but agree that it's VERY misleading indeed.

How about e-mailing them pointing out that a number of quite sensible friends, and yourself, were significantly misled by their website?

The better lenders say something like "2% discount giving a payable rate of 4.74% for 4 years, followed by SVR of 6.74% (APR 6.7%)". That wouldn't stretch the Barnsley's imagination, I'm sure.

adyfox

...ahh see what you mean. It is misleading however, they do offer a 3.75% discount for 2 years which, based on what we now know, is still an attractive rate of 2.99% for 2 years (6.74% base rate less the 3.75% discount). I'm currently paying 4.89% and this would halve my repayments.

adyfox

...just spotted that the above is based on a tie in for four years and after the second year you jump to the 6.74%. This means you would pay this rate for the last two years.