'Future Perfect' is not so perfect (Standard Life Bank)

Member Name: stevenjw

Product:	Standard Life Bank
Date:	22/10/01 (899 review reads)
Rating:

Advantages: capped for 25yrs, affordable rate 6.25%, may have a winfall with no added costs in the future

Disadvantages: slow to reduce the rate from the capped rate, Capped rate is now 6.59%, uses the halifax and C&G to set the rates

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.

Summary: