A mortgage with a record breaking arrangement fee of up to £137,500 was launched today by mortgage broker John Charcoal.
The two-year tracker deal is the lowest in the market, offering a rate of 0.01% below the Bank of England base rate. That currently equates to a low 4.99%. However, the marketing leading rate comes with a hefty 2.75% arrangement fee.
If an arrangement fee of £137,500 seems a little high, there is an alternative tracker mortgage available offering a rate of 0.74% above the base rate. This deal has an arrangement fee of a mere 1.25%, i.e. up to £62,500 ($124,000).
Both of these mortgages are available for mortgages between £500,000 and £5,000,000.
Ray Boulger of John Charcol comments: " Many borrowers will be coming off 5 year fixed rates of less than 4% in the next few months, and many others will be coming to the end of 2 or 3 year fixed or tracker mortgages with rates well under 5%.
"Switching to a new large loan fixed rate without paying a big fee will mean paying a rate close to 7%. Even switching to a new tracker without paying a big fee will mean paying well over 6%.
"These two deals are designed to accommodate borrowers who cannot easily afford to pay, or can but don't want to pay, the much higher rates which would be necessary without a big fee being used to subsidise the rate."
He added that the loans were “particularly good value for those who need over £1million”.
If you’re not yet convinced whether this mortgage is right for you, you may be persuaded by the fact that there are no early redemption charges, meaning you can make overpayments!
The fee of £137,500 is 2.75% of £5 million
Compare mortgages via money.co.uk
