Who would have thought it? After being roundly castigated for selling two slices of cauliflower for £2 (and withdrawing them from sale shortly after) Marks & Sparks is now offering good value on something even more mundane than winter vegetables. For the first time, it’s offering mortgages – and with an emphasis on value for money, particularly for first time buyers.
The deals are out today (via M&S Bank or brokers, including our favourite fee-free one, London & Country, www.landc.co.uk) .There is a two year fixed rate deal on a maximum 90% loan to value (so only a 10% deposit required) at 2.09% with a £995 fee or 2.49% with no fee. And there’s £1,000 cash back – so even if you go for the fee-paying option, that’s almost wiped out. For a five year fixed rate first time buyers can get 2.59% with the £995 fee or 2.79% without, and again, £1,000 cashback all on 90% loan to value (LTV). Those not wanting to fix (although I would, were I taking out a mortgage at the moment) there’s a two year tracker at 1.99% with £995 fee or 2.39% without. These also get the £1,000 cashback. All first-time buyers also get free valuations and M&S allows up to four borrowers who will live in the property to take out a mortgage, allowing friends to buy together.
As far as the rates go, they look pretty good. Moneyfacts currently has Post Office Money with a two year fix at 1.49% on an 85% LTV. The fee is £995 and £999. So, the rate is lower than M&S but there’s no cashback and you’d need a (marginally) bigger deposit. For a five year fix, Virgin Money has 90% LTV with a rate of 2.5% - slightly better than M&S, though no cashback, again and a £995 fee.
Other homebuyers and those remortgaging also get a range of deals (though no cashbacks) from M&S. These include 1.69% for a two year fix with a £995 fee, free valuation and on an 80% LTV (2.09% with no fee) – not far off the 1.44% from HSBC on the same LTV. So, a much better deal than a M&S cauliflower steak – and hopefully, these deals will be around longer than those...
See our guides to mortgages here