Five year fixed rate mortgage launched by Co-op

Consumers that are looking to take out or switch to a fixed rate mortgage may be interested to hear that the Co-op has launched a new mortgage product that is said to offer a highly competitive rate of interest.

The lender has launched a five year fixed rate mortgage deal that will be available to eligible and qualifying borrowers, and the rate set on the mortgage will be 4.49 percent.

The mortgage came onto the market in the middle of January, but in order to qualify borrowers must be able to put down a deposit of at least 40 percent. The five year fixed period means that consumers can safeguard themselves against rising interest rates for a number of years and can enjoy financial stability through having fixed repayments for a five year period.

However, with interest rates plummeting and set to fall further many may want to stick to a variable rate mortgage or wait to see if fixed rate deals come down further.

The benefits of the mortgage from the Co-op include flexibility, such as being able to overpay on your mortgage, underpay on the mortgage, or even take a payment holiday.

An official from Co-op said: “With base interest rates reaching an historic low and rates across the industry falling, this new mortgage offers customers the chance to fix in their mortgage payments at a low rate and have peace of mind that their payments will remain unchanged at this level for the next five years.”

Another industry official said: “If you’re lucky enough to have at least 40% equity in your home then this mortgage does offer a great opportunity to fix your interest rate at a low level. However, before deciding on a mortgage it’s essential to compare mortgages to find a good deal, and then speak to a mortgage broker for professional advice.”

Tags: new mortgage product, payments, order, five year fixed rate mortgage, number, January, coop, Co-op include flexibility

Merger between Co-op and Britannia

According to recent reports there is to be a merger between the Britannia Building Society and Co-operative Financial Services. The merger will take place in the event that a new law that allows mutuals to merge is given the go ahead in March. Read more

Tags: substance, damage, redundancies, mutuals, new law, coop, Owing

Co-op under fire over bank charges

The Co-operative Bank, which described itself as ‘ethical’ has come under fire after announcing a change to the way that it charges on unauthorised overdrafts.

According to experts the new charging structure that will come into force next month will not only push people into debt more quickly, but will also affect lower income customers the most. The changes are to take effect next month, and campaigners state that lower income banking customers could really bear the brunt of the changes.

The UK’s financial regulator, the Financial Services Authority, stated earlier this year that banks could temporarily put the brakes on issuing bank charge refunds until the High Court test case had taken place in January 2008. However, experts state that the new Co-operative Bank charges appear to be in violation of the FSA guidelines. This was because banks were told at that time not to make any material changes or raise overdraft fees.

The fee from the Co-operative Bank will still be capped at £100 per month, but under the new structure many customers will clock up a higher fee more quickly, reaching the £100 limit faster than they would have done over the old structure. It is estimated that close to one million customers could fall victim to this new charging structure.

An official from the Consumer Action Group stated: ‘These clever changes will hit those people who are eking out a living day by day and go over their limit just before pay-day. This happens an awful lot for people on benefits and people like young single mums, who run out of money just at the end of the month. If you are in a vulnerable group this will happen every month of your life. These changes are likely to break the camel’s back for them. The Co-op is just throwing this at them because it knows they have no mobility in their accounts and can’t go anywhere else because of their credit rating. This is an insidious charge based on the knowledge that those affected just can’t walk away.’

Tom Smith
7th December 2007

Tags: capped, cost, fsa, coop, bank, financial, charges, fees