Flexibility and then some ..... (Standard Life Bank)

Member Name: Macliam

Product:	Standard Life Bank
Date:	05/04/01 (204 review reads)
Rating:

Advantages: Straightforward, honest and fairly flexible

Disadvantages: Postal-based and a bit 'old fashioned'

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!

Summary: