Wednesday, Sep 30, 2009

Its yet another scam, isn't it?

Telegraph: Lloyds admits to using 2.99pc mortgage to attract branch customers despite strict lending criteria

"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". "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".

Posted by alan @ 09:52 AM (715 views)
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1. Urbanbear said...

Cheeky banksters! I saw plenty of financial illusions, like this, while re-mortgaging recently; fortunately I am smart enough to understand compound interest and how to calculate its effects monthly, via a spreadsheet, so had a much better idea of the relative merits of several different mortgages.

Using my spreadsheet and tweaks, the actual rate would be:
6.14%, for £750 per month and no fees, or
6.20%, for £1000 per month and no fees,
what a rip-off!!

I did much better than this, I got under 5% fixed, for 3 years, no fees, and without the cheeky 60% LTV requirement!

Unfortunately most of the population are not be capable of modelling compound interest, so are far more vulnerable to these scams, even with the dubious APR figure, so the best approach is to speak with a competent 'no-fees' mortgage broker (e.g L&C), then see if you can get a better deal with their current lender.

Wednesday, September 30, 2009 10:50PM Report Comment
 

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