Moneyfacts.co.uk – weekly product update 15/11/2007
- ASDA enters the savings market
- Co-operative Bank relaunches it’s 25-year fixed rate deal
- Northern Rock tightens loan criteria
ASDA enters the savings market
ASDA launches into the savings market with a bang, offering a competitively priced no notice account, requiring a minimum deposit of £100 Internet Savings pays 6.35%(6.17% monthly). The rate includes a 0.60% bonus (0.57% for monthly option) for the first 12 months, and the underlying rate is guaranteed to be at least equal to Base Rate until 31.10.10.
Rachel Thrussell, Head of Savings at Moneyfacts.co.uk, comments:
“It is good to see another entrant in to the very competitive internet savings market. With this intense competition comes higher rates – which can only be good news for savers.
“At 6.35% it is one of the top internet accounts around. But you need to be aware that the rate will become less competitive once the bonus expires after the first year.
“Traditional banks and building societies are really having to ramp up their game to stay competitive against the new entrants such as supermarkets and overseas providers.
“Look beyond your high street and you will may be surprised at just how uncompetitive your existing savings have become.”
Co-operative Bank relaunches it’s 25 year fixed rate deal
This week sees the relaunch of Co-operative’s 25 year fixed rate mortgage deal. Available up to 95% with a fee of £599, charging a rate of 5.95%, with a free valuation & legal fees for borrowers remortgaging.
Julia Harris, Mortgage Expert at Moneyfacts.co.uk, comments:
“The Co-operative 25 year deal is amongst the market leading rates, and with the added benefit of only a 10-year tie in period, it offers great flexibility. With a below average arrangement fee of £599, the upfront costs of this deal are appealing too.
“With over 100 products available to those looking to fix for 10 years or more, there is certainly growing choice. With rates not dissimilar to many shorter term fixed deals, the true benefit is paying only one upfront fee. But even 10 years is a long term commitment, and should you need to exit this deal for any reason, the early redemption charges can be costly.”
Northern Rock tightens loan criteria
Northern Rock sees the first tightening of loan criteria, reducing its maximum term from 10 years to the market standard of seven.
Samantha Owens, Head of Personal Finance at Moneyfacts.co.uk, comments:
“With significant evidence of rate rises, this is the first lender to make changes to the conditions of its deal. Northern Rock did stand out from the crowd offering a 10-year personal loan, so this latest move brings them back in line with the market.
“As rates continue to rise and lenders withdraw from the market, borrowers will face not only higher prices but less choice. While virtually undetectable to the outside world, the evidence of increasing rejection rates would also indicates that lenders are making behind the scenes changes to their scorecards and criteria.
“It’s becoming a much more cautious lending environment. Borrowers must take the time to find the best deal for them. Many of the loan rates now advertised are typical rates, so you could find yourself paying a rate higher than that advertised.”
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