Coventry announce new capped rate mortgage

In a statement earlier this morning, the Coventry Building Society announced changes to their current range of mortgages, including the introduction of two new capped rate schemes. The new products will be available from this Friday 06 March, and advised applications can be made through any of the Coventry's panel of registered intermediaries. Applications for the existing range have to be received by the Coventry by 10.00pm on Thursday 05 March.

The new capped rate schemes consist of a residential product and a buy to let product. The residential product is a three year tracker at 2.99% above the Bank of England base rate, giving a current rate of 3.99% with the cap being set at 4.99%. Applications can be considered from both those wishing to buy a house, and those wishing to switch their mortgage from another lender, with both being available for mortgages of up to 75% of the value of the property. The Coventry will charge a booking fee of £199 and an arrangement fee of £800, which can be added to the loan if required. For those switching their mortgage from another lender, the Coventry will cover the costs of the valuation and provide a free legal service.

The buy to let deal is also a three year tracker, and is priced at 3.49% above the Bank of England base rate, giving an initial payable rate of 4.49% with the cap set at 5.49%. Again, the scheme is available to both those wishing to buy a home to let out, and those who already have tenants in a property but wish to switch the mortgage from another lender. The scheme can consider applications up to 65% of the value of the property, and like the residential version, those who are switching from another lender will benefit from a free valuation and free legal service. In common with buy to let loans generally, the charges are a little higher, but the booking fee of £250 and the arrangement fee of £1749 compares favourable with other similar rates from other lenders, where a percentage based arrangement fee is more common. Tim Lee, Managing Director of The Mortgage Warehouse said:

"This announcement is extremely welcome as it offers a peace of mind solution to applicants who want a tracker rate, but are worried that increases in the Bank of England base rate could see them tied into a deal which could become increasingly expensive.

"However, the Coventry are mistaken in their belief that they are the only lender to currently offer a capped rate option, appearing to have missed the earlier, but more expensive schemes announced by the Woolwich yesterday."

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