23. September 2009 20:39
This reminds us of the old days of building societies.
Coventry Building Society, the nation's third biggest, has released a great new mortgage deal for first time buyers. It's:
- it's available up to 90% LTV
- it has a rate of 5.99 per cent, fixed for 5 years
- the application fee is only £199
...which sounds good to us, and—we're sure—many other would-be first time buyers. For a 5-year fixed rate that's currently a market leader.
But it's only open to members and their families...
Either you or your parents needs to be an existing member of the society. In this particular case, the deal is reserved for members or children of members with a current account or savings account held for over three years.
The deal also comes with a £500 IKEA gift card on completion of the mortgage—another nice perk.
Coventry's spokesperson said that the building society had a long history of preferential rates for members, and that it wants to reward loyalty as well as the discipline involved in saving regularly.
This used to be common practice among building society lenders, but the practice was eroded as they began to compete in order to expand market share.
If you're not a Coventry member, or have been a saver for less than three years, what's the next best deal you can get with them? Only 85% loan to value (for the same interest rate and fixed period), and by the looks of it there'd be an extra £300 fee as well.
Let's see whether other societies also start restricting great deals for their membership. It could be back to the 1980s in another way.