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moneynet product focus 28 may 2009
Published: 28/05/2009 |
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Andrew Hagger of Moneynet.co.uk looks at some of the more eye catching personal finance product changes this week. Mortgages With mortgage lending at an eight year low, providers are jostling for best buy recognition in an attempt to increase business levels. The launch of a market leading three year tracker deal from the Co-operative Bank at 2.39% looks an attractive proposition. Charging just 1.89% above base at max 75% LTV with a fee of £995 it represents a serious alternative when compared to the best three year fixed rate deals which are currently a shade under 4% The new Halifax 2.99% tracker to July 2011 on the other hand is likely to causes less of a stir with a loading of 2.49% above base at a lower LTV of 60% and a far less palatable product fee of 2% of the advance. Savings The fixed rate bond market is still bubbling, and this week’s release of a 16 month internet bond priced at 4.05% from the AA represents good value when compared with West Bromwich Building Society at 4.15% for 2 Years and a shorter term option from ICICI Bank at 4% for one year. Savers shouldn’t be swayed by an additional 0.1% or 0.2% to lock their money away for four or five years as they risk losing out when rates recover, the shorter term strategy certainly makes more sense in the current environment. Current Accounts Customers of Barclays will be far from happy to learn that their provider is hiking some current account authorised overdraft rates from Monday 8th June. The Barclays Bank Account jumps by 1.4% to 19.3% EAR whilst Additions Active becomes 3% more expensive at 12.9% EAR. On a more positive note the Current Account Plus rate is being cut by 1% to 16.9% EAR Moneynet research reveals that the average interest rate for current account overdrafts is now 14.4%. For someone with a £500 overdrawn balance a 3% rate increase will see them paying an additional £15 per annum in interest charges The Barclays Graduate account authorised overdraft rate is being ramped up by a wallet draining 3.7% to 19.3%, leaving someone with a £2000 debt having to shell out an additional £74 interest charges over the course of a year. ENDS
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