Best picks of the week…

Saturday, 7 February 2015
It has been a busy week at Moneyfacts with regard to the number of new launches and tweaks to existing products – a whopping 1,918 in all. While savings rates remain subdued, we do have a bond that hits the best buy tables with three of its terms. But the winners this week have to be those looking for a mortgage, whether first-time buyer, remortgagor or house-hopper; there really are some amazing deals to be had.

Savings

The best new or improved savings product this week comes from United Bank UK.

United Bank UK wasformed in 2001 as a result of a merger between UK branches of United Bank Ltd and National Bank of Pakistan (two of the largest banks in Pakistan). The bank holds a UK banking license. It is authorised by the Prudential Regulation Authority and it is regulated by the Financial Conduct Authority in the same way as all UK banks are. Investors are protected by the Financial Services compensation scheme up to a maximum of £85,000.

The products that caught my eye this week are the Fixed Term Deposits, as the rate paid on them has been increased.

  • 1 Year bond pays 1.75% on maturity.
  • 2 Year now pays 2.15% yearly making it a Moneyfacts best buy.
  • 3 Year now pays 2.45% yearly, also a best buy
  • 5 Year pays 3.02% yearly which is yet another best buy.

The good news for anyone looking to supplement their income is that these bonds offer a monthly option although it does pay a slightly lower rate.

The minimum investment is £2,000. Just be sure that you won’t need access to your money early, because while you can get your hands on it, the cost is very costly, at up to 365 days’ loss of interest depending on which bond you choose.

Mortgages

After years of drought, the mortgage market is almost back in full swing. We certainly have the beginnings of a price war in the fixed rate arena. This week’s mortgage stars for me are…

Woolwich from Barclays, which has reduced some (sadly not all) of its fixed rates by up to 0.70%. The most attractive of the reduced offers is the 3.99%, two-year fixed rate deal which allows you to borrow 95% of the house value. This deal, which has no set-up fee, was already a Moneyfacts best buy with a market-leading rate, so this latest reduction just builds on what was already a great offer.

If you are thinking of fixing for longer, then Santander has amended its mortgage range and the result is a very attractive 10-year deal priced at 2.94%, fixed until 2 May 2025. Its appeal will be broadened even more now that it will lend up to 70% of the property value.

There is a fee, but it is reasonable at £995, and includes an incentive package of a free valuation. Just to put this deal into context, the nearest rival that lends at 70% loan-to-value for this term has a rate of 3.44%, so it really is a great choice.