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Five minute finance: ISAs, mortgages, credit cards

Five minute finance: ISAs, mortgages, credit cards

Category: Money

Updated: 14/12/2012
First Published: 12/04/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

It proved unlucky for some this week as the Bank of England voted to keep base rate at a record low for the thirteenth month in a row. After such a long period at 0.50pc, savings providers seem to have assessed the market and priced their products accordingly. As a result, activity in the savings market has slowed, with the 2010 ISA season a quiet one compared with previous years.

Most of the activity in the savings market remains focused on fixed rate products, accounting for more than three quarters of all changes. At the end of 2009, banks were paying a premium to savers in order to tie their money in, but as this demand has fallen, so too have rates. Despite the pace of decline easing, we are still seeing some of the lowest rates on record.

The focus for providers remains firmly on the mortgage market, which continues to see increased competition amongst lenders. This, in turn, is driving rates downwards. While the majority of the activity is aimed at borrowers with at least a 25pc deposit, there are a number of lenders making moves for those with smaller deposits.

Market leading ISA

Savers looking to transfer their ISA balances might like to consider the new Fixed Rate ISA from Nottingham Building Society. The account has a three year term and pays a market leading rate of 4.00pc. Savers can invest upwards of £15,000 into the account, with further additions permitted whilst the issue remains open. Access is not allowed during the term of deal.

Build your ISA balance

Principality Building Society has launched its new ISA Builder Plan, combining an ISA with a fixed rate bond. Savers wishing to opt for the five year plan can invest this year's allowance of £5,100 into an ISA paying 4.60pc, with a further £20,400 invested in the Builder Bond also paying 4.60pc. Then, for the next four years, the plan automatically transfers the full annual ISA limit from the bond into the ISA. A three year plan is also available at 3.80pc.

Woolwich raises the bar on competitive mortgage deals

This week Woolwich mortgages from Barclays made substantial cuts to its tracker and fixed rate range. The new range includes a market leading lifetime tracker which has been reduced by 0.10pc to 2.49pc (Barclays base rate plus 1.99pc) with a 70pc loan to value and a fee of £1,499. However, the fee free version of this product has been reduced by 0.30pc to 2.99pc. It is always worth calculating the rate and fee combination against the level of borrowing to see which version of a mortgage is most suitable.

Travel friendly card from SAGA

SAGA has removed the foreign usage charge payable when using its credit card abroad. This move means SAGA is now only one of three providers who do not apply a foreign usage charge, which is typically 2.75pc. Its Platinum Credit Card also offers 0pc on new purchases and balance transfers for nine months, reverting to a competitive 11.9% APR. Like all SAGA products, the card is available to customers aged 50 years and over.

Sainsbury's scores points with new credit cards

Sainsbury's Finance has launched two new credit cards, one offering 12.9pc APR on purchases and balance transfers and double Nectar points on Sainsbury's shopping for two years, favourable to those who clear their balances on a monthly basis. The other card offers 0pc APR on purchases and balance transfers for 12 months. Customers will need a Nectar card to apply for either of these deals.

Find the best savings account for you - Compare best selling savings accounts
Find the best mortgage for you - Compare best selling mortgages
Find the best credit card for you - compare credit cards

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.