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Lloyds Admits To Using 'misleading' 2.99pc Mortgage

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http://www.telegraph.co.uk/finance/persona...g-criteria.html

Lloyds TSB has been accused of misleading customers with a 2.99 per cent mortgage, which it admits to using to attract more customers into its branches despite strict lending criteria attached to the deal.

In a letter to branch managers, seen by The Daily Telegraph, Lloyds TSB said it is launching a 2.99 per cent two year fixed rate mortgage for those with a 40 per cent deposit.

The deal also has a 2.5 per cent arrangement fee – one of the highest on the market – meaning customers with a typical mortgage of £150,000 pay almost £4,000 just for the mortgage to be processed.

The letters states the product “isn’t suitable for everyone†and should be used as “a conversation starter with potential mortgage customersâ€. It even suggests a way employees can use the product, saying they should ask customers: “Did you know we have a great range of fixed-rate mortgages starting from as low as 2.99 per cent?â€

But with such strict lending criteria, experts said it was unlikely to sell more than a handful of the deals.

Hannah-Mercedes Skenfield, of personal finance website moneysupermarket.com, said: “It is encouraging to see lenders bringing new lower rates to market. However, with 77 per cent of mortgage borrowers unable to qualify for the product’s 60 per cent loan-to-value criterion, and a fee of £3,750 on a £150,000 mortgage, it appears that Lloyds has designed a headline rate for marketing impact rather that rather than real borrower benefit.

“Consumers should not be seduced by headline grabbing rates as all too often they don’t make financial sense. In this instance the high fee means most borrowers should be able to find more suitable deals elsewhere, which is why they need to shop around and weigh up their options to find the best deal for their own circumstances."

Nice, thank god we don't own a huge chunk of a money grabbing bank, I'm sure this sort of thing wouldn't sit easy with Gordon's moral compass.

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No it's innovation like this that makes our financial centre the envy of the world.

Products. If you please.

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Corrected. It's innovative products such these that make our financial centre the envy of the world. A world that GB has in fact saved.

knowledge economy. its great isnt it. appears the Knowledge is how to con the customer.

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Hannah-Mercedes Skenfield, of personal finance website moneysupermarket.com, said: “It is encouraging to see lenders bringing new lower rates to market.

since when has 2.99% pa plus 2.5% upfront been cheap. That works out as around 4.22% pa with no upfront.

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i just asked HSBC if i could have their 1.99% offer fixed over 5 years. they told me no and that there was a £1200 arrangement fee and that early payment of the mortgage was against the terms and a breach of contract. the best they could do was 4.5% or something over 5 years £1200 arrangement at 60% LTV....

I said thanks, and ordered 3.

i bit my lip actually as usually i like HSBC so to call them a bunch of cuunts would be very unlike me.

in other words it sucked.

Edited by 51%deposit

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