As they say, 'the proof is in the pudding!' Yum!
There is a good chance you will have read elsewhere on this site that we get you the best deal available from the whole of the market.
You have probably read that we have some 80 lenders available and just over 4,000 deals to choose from.
We also shop around, using 10 insurers, to get you great value on your mortgage related insurances.
All impressive I am sure, but what does it mean in reality?
Well ........... judge for yourself.
Lets put Mortgage Solutions to the test. We sent out a real mystery shopper to compare what's on offer! It cost us lunch.
PLACE: BRADFORD DATE: NOVEMBER 2010 WEATHER: RAINING
The Senario
Today, we have a real couple acting as mystery shoppers. They have independently chosen a High Street Bank in Bradford to get the best deal they have available. This happens every day.
The mystery shoppers know about mortgages as they have had one with the same lender for the last 7 years.
They are paying a high standard variable rate with their existing lender at 5.44% variable.
They are on an Interest only Mortgage and they have an existing Endowment policy which is on-track to pay off the outstanding balance of £72,000 in just 6 years time.
They are considering whether it is worth moving the mortgage deal given there is such a short period left.
They are paying the existing lender £326.40 per month.
He earns £26,000pa and is 55 years old. She earns £13,000pa and is 52. They have a clean credit history.
They have no financial commitments. They want to see what savings can be made, if any.
The existing house is worth about £160,000.
The Bank
With the equity available (which makes the deal more secure for the Bank) naturally the Bank are able to offer a more competitive deal than they are currently paying to the existing lender.
The Bank suggested a choice from their 'tracker range' as they were the cheapest.
They were offered a choice of 6 products.
The deal chosen by the clients as best value is a 2 year tracker at 2.89 above base rate giving a pay rate of 3.39%.
The deal has no arrangement fees and comes with a free valuation and free legal fees. A Great deal.
After the 2 year deal ends the deal rises to the Standard Variable Rate offered by the Bank at 3.5%
which is much cheaper than their current lender.
The initial mortgage payment is £203.40pm (APR 3.6%), rising to £210.00pm variable after 2 years.
The total amount repayable over 6 years is £87,284. Therefore, the total charge for credit would be £15,284.
The figures in this section will vary following interest rate changes and if they do not keep the mortgage for 6 years.
Only use the figures in this section to compare the cost with another interest-only mortgage.
The Bank quoted insurances, all from 1 provider that they are tied to, the customers declined the quotations as
they were satisfied with their existing cover.
Total Mortgage Payment - Bank = £203.40pm (Saving the customer exactly £123.00pm)
Mortgage Solutions
To play fair, we matched the criteria that the bank had put before them, otherwise what's the point?
Firstly, our search came back with 75 deals available to them all with no fees, free survey and free legal fees.
Our best deal is a lifetime tracker at 2.18 above base rate giving a pay rate of 2.68%. (APR 2.9%)
The mortgage payment is £160.80pm.
As it is a lifetime tracker, the product remains in place for the full 6 years, which means that it is likely to remain cheaper when the 'other' bank deal comes to an end.
The total amount repayable over 6 years is £84,007. Therefore, the total charge fro credit would be £12,007.
The figures in this section will vary following interest rate changes and if they do not keep
the mortgage for 6 years. Only use the figures in this section to compare the cost with another interest-only mortgage.
Total Mortgage Payment - Mortgage Solutions = £160.80pm (Saving the client £165.60pm)
That's a saving of £165.60pm against the current deal.
Over 6 years that is just under £12,000.
Worth moving the deal for?
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