Moneyfacts Weekly Product News – 28.01.21

The Moneyfacts.co.uk Pick of the Week showcases the best of the latest products or rate changes to hit the consumer finance market.

Al Rayan Bank – 12 Month Fixed Term Deposit

Al Rayan Bank has increased the rates on a selection of its Fixed Term Deposit accounts and also launched a new 18-month version this week. Securing the lead position in our top rate tables, the 12-month option now pays an expected profit rate of 0.85% quarterly, after an increase of 0.20% this week. This can also be taken as an income at a reduced rate, which may be of interest to those hoping to supplement their income during these uncertain times. As is common with fixed rate bonds, early access or further additions are not permitted, so savers should be confident to secure their savings pot away for the term at outset. On balance, this account earns an Excellent Moneyfacts product rating.

Key product details:

• Rate: 0.85% gross / 0.85% AER, payable quarterly
• Notice / term: 12 months
• Minimum opening amount: £5,000
• Maximum investment amount: £999,999
• Access: Not permitted
• Further additions: Not permitted
• Opening account: Online, via its app, by phone or in branch
• Managing account: Online, via its app, by phone and in branch
• Other information: Minimum applicant age 16, joint account option available, Sharia-compliant account, rates shown are expected profit rate.

Virgin Money – Three-year fixed rate mortgage, 85% loan-to-value

Virgin Money has reduced a handful of its fixed rate products this week, including making a cut of 0.13% on its three-year fixed rate fee saver deal at 85% loan-to-value. Now priced at 3.16% to 1.5.24, this compares competitively to similar mortgage deals currently offered. There is no fee to pay, which may be a positive for those hoping to keep any set-up costs for their mortgage to a minimum. On this basis, this product secures Outstanding Moneyfacts product rating.

Key product details:

• Rate: 3.16% fixed rate to 1.5.24
• Product fee: None
• Maximum loan-to-value: 85%
• Available to: House purchase customers
• Incentives: None
• Flexible features: Allows overpayments, payment holidays considered subject to arrangement
• Lending area: Great Britain and Northern Ireland.

HSBC – Five-year fixed rate mortgage, 75% loan-to-value

This week, HSBC has made rate reductions across a swathe of its residential offerings, with some deals receiving cuts of up to 0.40%. One deal to see an amendment is the five-year fixed rate at 75% loan-to-value. Dropping by 0.05% to 1.64% until 31.5.26, this small cut ensures the deal becomes one of the lowest currently available on rate alone in this sector of the market. There is a reasonable fee of £999, which borrowers would need to pay upfront, but those hoping to keep their mortgage costs down may be pleased to see this product carries an incentive package of a free valuation for all borrowers, while remortgage customers can benefit from free legal fees. Overall, this deal earns an Outstanding Moneyfacts product rating.

Key product details:

• Rate: 1.64% fixed rate to 31.5.26
• Product fee: £999
• Maximum loan-to-value: 75%
• Available to: All borrowers
• Incentives: Free valuation and for those remortgaging, free legal fees
• Flexible features: Allows overpayments
• Lending area: Great Britain and Northern Ireland.

Loughborough Building Society – Two-year discounted variable rate mortgage, 80% loan-to-value

This week, Loughborough Building Society has increased rates on a handful of its buy-to-let mortgage products while at the same time removing the fee previously applied to these deals. The two-year discounted variable rate has seen a rise of 0.16% and is now priced at 3.15%. Despite this increase, the fact that there is now no fee to pay for this deal, while the incentive of a free valuation remains unchanged, is a combination of features that earns this deal an Outstanding Moneyfacts product rating.

Key product details:

• Rate: 3.15% discounted variable rate for two years
• Product fee: None
• Maximum loan-to-value: 80%
• Available to: Second-time buyers and remortgage customers
• Incentives: Free valuation
• Flexible features: Allows overpayments
• Lending area: England and Wales.

M&S Bank – Personal Loan

This week sees M&S Bank amend the rates on selected tiers of its Personal Loan. This update sees the rate for borrowing amounts below £5,000 increased by up to 3.0% APR, a small uplift of 0.1% APR for shorter-term borrowing of amounts between £15,001 and £20,000, but a decrease of 0.5% applied to borrowing between £5,000 and £7,499, which is now priced at 3.9% APR. Despite the increase in overall cost of lending, those looking to raise £7,500 to £15,000 will find this loan still offers some of the most competitive rates available at 2.9% APR. There is also an option to defer repayments at the start of the loan, which may be appealing to some borrowers. Overall, this loan earns an Excellent Moneyfacts product rating.

Key product details:

• Representative APR: 2.9%
• Loan period: Rate shown is based on a term of 60 months for a £7,500 borrowing
• Application available: Online, by phone and in branch
• Other information: Minimum age 18, minimum income £10,000, you may be offered an alternative APR dependent on credit rating.