A new mortgage good for all weathers

We haven’t seen much innovation in the mortgage market of late, so two cheers for Cheltenham and Gloucester’s new All Weather Mortgage, which combines the benefits of tracker and fixed rate loans. C G is the mortgage arm of Lloyds TSB, which like the other high street banks wants to win back some of the share of the mortgage market it lost to more aggressive lenders in the 2004-06 boom.

Its new All Weather Mortgage is a base rate tracker mortage with a term of two or five years which gives you the option to switch to a fixed rate mortgage at any time. C G say they will always have a fee-free fixed-rate deal on offer, and while this may not be the best rate on the market, avoiding fees is now a priority for many borrowers.

Longer-term mortgages avoid вЂchurn’ Over the past five years, mortgage brokers have encouraged more and more borrowers to go for short-term deals so that they can earn another commission when the initial deal ends and the borrower faces an uplift to the lender’s Standard Variable Rate. But then lenders struck back by demanding much higher arrangement fees, which on the best-rate deals are now often over ВЈ2,000.

Paying such high fees makes no sense for people with mortgages of under ВЈ100,000. So avoiding the need to re-mortgage regularly by choosing decent longer-term deals is now a sensible strategy for most borrowers. Will C G’s All-Weather Mortgage provide the answer? Well, in terms of the tracker element, it does.