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The mortgage on my previous house was with the Halifax and thought I had a good deal with my 10.35% rate fixed for five years. Subsequently the mortgage rates went down drastically and I could not afford the redemption penalties leaving me stuck on this rate from 1991-95. When I bought my current house I thought I had found the mortgage deal of a life time with the Future Perfect mortgage, the mortgage is capped at 6.25% for 25Yrs meaning I will never pay more than 6.25%. There is a possibility that the rate will go down if the Halifax, Abbey National, C&G and standard life banks variable rates average less than my capped rate. The only problem is that the Halifax and C&G keep their variable rates at above twice the BoE base rate. The average of these rates is 6.56% with the base rate at 4.5%. The bank of england would need to reduce rate by a further 0.5% for mwe to see my rate come down and even then it will only reduce by a few basis points. On the other hand I can rest assured that my mortgage will never go higher than the 6.25% I currently pay which gives me and my young family lots of security. My mortgage payments are less than a third of my take home pay and hopefully will become even more affordable as time goes on. There is no need to think about refinancing my mortgage as the security it offers far outweighs the small saving I could make in the very short term whilst the interest rates are at historic lows. The mortgage application process is simple and can be done over the phone. The staff are helpful and will call you back if there is no imediate answer to your questions. The legal side of the mortgage products are based on scottich law and adapted for english law so they may seem a little different than what you will be used to. Lump sum payments can be made if you have any spare cash. One of the other reasons I decided on standard life bank is the fact that it is a mutual and I did not have sign over any f
uture windfalls to charity, etc. Demutualisation would not affect my mortgage or the ammount I would have to pay in the future although the service level may reduce.
We have had a mortgage with Standard Life Bank since 1999. When you telephone the Bank you do not get a computer but a human being. I have always found the staff, helpful, courteous and well informed. We have overpaid with a lump sum and also overpay monthly with our normal mortgage payment - there were no penalties for doing this. We can change and arrange building insurance companies without being charged for "adminstration". The Bank arranged a "reserve" when we applied for our mortgage, subject to our ability to pay. There are no time limits on how long you can hold this "extra" money or any charges to keep it available. The reserve is available without charge, when we should need it. We arranged this mortgage with their fee free service and then had a six month interest discount and a period of accident, sickness and unemployment cover for free. We are informed by post when the interest rate charged is changed. We chose when to have our account direct debited for the mortgage payment. We did have a problem using their solicitors to transact the mortgage and it was held up unnecessarily. With hindsight we would have used our own solicitors. The interest is charged daily. After the six month discount period there are no redemption penalties. No application or arrangement fees. Perhaps the only thing extra required is a slightly lower interest rate, currently 6.25 (Bank of England base rate 5.25), combined with a current account mortage with all the above advantages. Payment holidays are allowed, there are no MIG fees, and you can have both an interest only mortage and repayment type running at the same time.
A combination of bonuses and saving means I have a history of reducing the capital I owe on my mortgage. Both my previous lenders penalised me for doing this. (Birmingham Midshires imposed a ridiculous interest rate once the capital fell below a certain limit (... but didn't see fit to tell me). Halifax tried to charge me a partial redemption fee until I threatened to move the whole mortgage.) This time, I needed about £30,000 to 'top up' the proceeds from my previous house, but I had endowments to cover £75,000 and I wanted to keep some cash in hand for furniture etc. So the idea of a 'flexible' mortgage was very attractive as I could initially borrow more than I needed and pay back the excess when I felt comfortable. I looked at several alternatives - and there are even more now - before settling on Standard Life. Some were not a 'flexible' as they claim, Virgin were honest enough to tell me that they didn't want my business because they would not make enough money!! I finally went for Standard Life because: a) The application process was straightforward and they refund valuation and solicitors fees (or at least a good part) b) They charge interest on a daily basis c) If you overpay, you can get the cash back later (that effectively means you get 'interest' at the mortgage rate - tax free, as a higher rate tax payer that's very attractive!) d) I liked the fact that they take a 'holistic' approach to lending and lend you what they think you can afford, rather than a set formula of 'income x n' etc. e) I liked the fact that although I only wanted £75,000, they allowed a theoretical £100,00+, the remainder of which I can draw down later if I need it. The only disadvantages I can see are: a) If you are not financially disciplined, it's not for you. b) It's heavily postal-based, with little or no Internet access
c) Overpayment is only accepted by cheque Since taking on the mortgage, I’ve reduced the capital considerably by twice sending in an overpayment. The contact has been friendly and informative and within a few days I have got back a letter stating my overpayment, a re-calculated amount outstanding and cost per month. No whinges, no problem. I’ve also arranged to overpay by a set amount every month, which is better than saving in a bank. This reduces my monthly payments, saves me extra interest long-term and ‘pays’ me a good rate of interest, tax free (see above). Up to now I’ve got no complaints!
It was actually for the best that I hadn't ever seen a Standard Life commercial on TV. The way I view commercials is that I'll buy what I want, but if the company is annoying I may go out of my way NOT to buy their product. I almost certainly would have gone to another bank. Standard Life was one of the first banks to offer a flexable mortgage. Basically you pay a set amount every month, but anytime you can send extra money in and they will either reduce your monthly payments or reduce your term to reflect the smaller amount of interest you will now be paying. We managed to knock off over 5 years of payments at the end in just over a year with overpayments. Also, they keep your overpayments separate so that if you ever need to 'borrow' money you can just take your extra payments back. We've been thinking of getting a new car, and we may reacquire some of our money. Meanwhile, it's reduced our interest by over 50 pounds per month, so even if we take it all back it's still saved us nearly a grand. They also give a six month discount (quite a heftly one as well) on their flexable mortgages. They are well worth looking into. Just don't watch their commercials.