Reduced int rate for <60% LTV on First Active Current A/C Mortgage?

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Betsy Og

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Just wondering if anyone has any info or experience on this one?

Current rate is 3.29% but could well be in a <60% LTV situation. Does anyone know if they look at the net figure combing the 2 accounts when determining the loan to compare against property value. - I suspect its the full loan account figure - since in theory you could go out and spend everything in the current account. Could do a transfer from current account against loan account but then peace of mind of ready funds is gone.

I've a call in to them so will update this thread with any info.
 
The response to this query, if anyone is interested, is that they dont offer a reduced interest rate with the Current Account Mortgage. So a good LTV is not of benefit from the point of view of reducing the rate.

Other things I was told (these were news to me so not 100% sure on them, and they were only points of general interest) were:

The reduced rate (based on good LTV's) is typically, if not exclusively, only available on tracker mortgages. i.e. not available on a standard variable or fixed (though there wouldnt seem to a particular logic underlying this- the basis of lower rate of interest on <60% LTV is, I understood, based on the great security the bank have, therefore the debt can be cheaper to take account of the lower risk)

You cant fix a tracker mortgage at any point during the loan (barring, I suppose, switching out of it altogether).

The other current account mortgage, NIB's offset mortgage, is "not as good", "doesnt have all the features of First Active" - in fairness to the person they acknowledged they didnt have the hard facts on this but the above was the conclusion from a newspaper review of both when NIB's came out.



Any comments on the above appreciated, and any views on whether it would pay to switch to Ulster Bank or others who do give low LTV interest rate. Currently paying 3.29% (price promise of 1.29% above ECB). Must say I like the CAM's peace of mind factor of having built up a reasonable level of funds in the current account and knowing they are instantly accessible, while still always reducing my mortgage - so wouldnt switch unless reasonable level of savings to be had.
 
Betsy_Og that is interesting.

The can't fix rule sounds like a consequence of the continual extra repayments
you're making through the current account. Extra repayments
aren't allowed with normal fixed rate loans without penalty.

For AAMers with great discipline of the type that will never get them onto Eddie Hobbs's
Television show there's the DIY Savings Account Mortgage* of a Northern
Rock on-line account and a separate low LTV tracker mortgage.

*Admittedly without the full benefits of the real thing.
 
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