Another First Direct Mortgage (First Direct)

Member Name: ShapeShifter

Product:	First Direct
Date:	03/01/03 (1654 review reads)
Rating:

Advantages: Clear explanation of complex concept, World Class customer service, Saves you money

Disadvantages: Variable rate (a personal preference)

This is about my second mortgage with First Direct.

My original mortgage was a fixed rate and as the fixed rate period was due to expire I had been thinking about a new mortgage and also shopping around for a good deal. I must admit the Virgin One account looked very good value for money. I liked the idea of linking savings and mortgage together to lower interest repayments and maybe pay it off early.

I'd not really been shopping around too much nor had I really given it much thought when my phone rang a few days later......... It was First Direct.

They'd noticed it too. So I mentioned the Virgin One account, this kind of honesty perversely they encourage, I've been with them for eight years. The guy at the end of the phone asked me a few questions, I could hear the typing of keys over the phone and then agreed that it would suit me after looking into my accounts (I hold two current accounts, a VISA card and an ISA) with First Direct and said that as I do manage to save some of my income (don't ask me how) then it would be a good proposition. Then he mentioned at the time of writing whilst the Virgin One interest rate was 5.2%, First Direct's was 4.75% and I wouldn't have to go thorough the process of closing/opening accounts etc, etc. It was called the Smart Mortgage and he gave me a quote for lumping it all together.

Phew ! That was quite a saving. Now I was interested......

A First Direct Smart Mortgage works in the same principle as a Virgin One account. You nominate the accounts you hold to all contribute to the Smart Mortgage, you can open as many accounts as you like to manage your money (think of them as pots). The mortgage debt is offset against all these accounts containing a positive balance and any savings accounts you hold with them. You pay interest daily (a big plus for any First direct mortgage). The result is even on my current repayment on a SmartMortgage, I could repa
y my mortgage a
nd consolidated loans 2 years earlier....

Now I was really interested. This guy had called me to save me money ! So I asked for the bumf to read and considered it. I like to think I have some financial savvy and the only difference I could find is the Virgin One account gives you a credit card at the 5.2% rate, the Smart Mortgage doesn't. I really didn't mind that as I don't like credit cards and only use them for emergencies. You can draw against the allotted mortgage limit (70% value of your home) as a loan by calling them for approval. The repayment date is even flexible. The mortgage repayment must be before your 65th birthday.

Basically, you get 4.75% on your savings, mortgage and also any other debt you might want to consolidate including HP for a car or credit cards. If you hold some savings, the amount is considered as equity against the mortgage capital and therefore lowering your interest repayment. Because of this, the 4.75% interest paid on savings is therefore tax free !!!!

Overpayments are allowed with no restriction including lump sum payments as and when you have spare cash. There is no penalty for early repayment nor leaving the mortgage for another competitor even after 1 month of starting it. Payment holidays are allowed as well.

The only drawbacks are it is a variable rate but guaranteed never to be 1% more than the Bank of England base rate and ISAs cannot be included in the list of nominated accounts.

It was all presented in clear and simple language, it was common sense and for someone totally uninterested in finance, it was easy to understand. This is the one thing I love about First Direct, sure they exist to make a profit but they never use the small print to catch you out. They know they are good, they even encourage you to shop around. End of the day, they offer the right products, great service, easy to understand advice and they will call you back
at YOUR convienienc
e, not theirs. Most of the work is done over the phone, even pre-filling out forms for you to reduce the hassle to you to a minimum.

It was £195 to arrange, for that all the legal work is done for you, you have to fill out an arrangement form and an agreement form. Not difficult and I hate form filling. The rest is left to them. The fee even includes a valuation and you get a copy of that to keep.

It takes 6-8 weeks, utterly painless, they write to you to keep you informed and you can call one person (they leave their name, number and their working hours) if you want to know what is happening.

This is how banking should be.

This mortgage is going to save me a small fortune, everything is managed by the on-line banking software. I've been with First Direct for over eight years now and they really are fantastic, everything done over the phone or net, always courteous and friendly staff.

Another First Direct winning product.

Summary: