The banks are increasingly looking to cash in on the January sales and are offering discounts on a wide range of products, such as current and savings accounts, in a bid to attract new business.
But be warned, not all of these sale deals are competitive, and you could come to regret a mortgage or account chosen because of the immediate savings made – rather than its suitability.
New Year mortgage deals
HSBC, for example, has launched its seventh annual sale, including a number of fee-free tracker mortgages.
Elsewhere, Santander has reduced fees on a selection of its two and five-year fixed and tracker products by £200, and Leeds building society has removed the £800 completion fee from its two-year discount mortgages, and is offering a free standard valuation up to £335, as well as free legal services for remortgages.
However, Melanie Bien, from broker Private Finance urges caution. She says: “With the HSBC deal, for example, rates start from 2.29 per cent which is market-leading – and there are no fees.” “But borrowers need at least a 40 per cent deposit, and can only access a tracker and not a fix. Given that many economists expect interest rates to rise this year, any borrower who would struggle with higher mortgage payments should consider a fix rather than be swayed by a tracker – no matter how cheap it is initially.”
When weighing up any offer, the key is to calculate the total cost of the deal.
“This means fees plus rate,” says Bien. “You must then compare it with what else is available to ensure you choose the right product for your circumstances.”
January sales on savings accounts
As part of its sale, HSBC is also offering up to 25 per cent off insurance premiums, discounts on certain current accounts, and higher rates on its Fixed Rate Saver and Regular Saver.
With its Regular Saver, for example, the rate has been increased from 2 per cent to a huge 10 per cent.
But while this rate, which is fixed for a year, may seem eye-catching, it’s only available to new and existing Premier and Advance current account customers. To get the Advance account, you’ll need to pay a monthly fee of £12.95, while the Advance Premier account has hefty funding requirements such as savings and investments of at least £50,000.
By contrast, the Halifax Reward account is a fee-free current account which pays customers £5 for every month they pay in £1,000.
Elsewhere in the savings market, the start of 2011 has also seen a flurry of activity in fixed rates, with Coventry and Yorkshire building societies launching three-year deals at 4.15 per cent and 4 per cent respectively. In the easy access market, West Bromwich Building Society has increased the rates on two of its easy access accounts to 2.4 per cent; all three of these accounts are market-leading.
Bargain loan and credit card deals
One of the best New Year deals is from Barclaycard which has extended the balance transfer period on its Platinum card to 17 months, the longest currently available.
In the loans market, providers have been battling it out to top the “best buy” tables in January, with Sainsbury’s cutting the rate on loans between £7,500 and £14,000 to 7.4 per cent, Marks & Spencer Money and HSBC lowering their rates to 7.5 per cent, and Tesco reducing its rate to 7.46 per cent.
Shop around
While some of the 2011 “January Sales” offers are competitive, the key to getting good value is by shopping around before signing up.
“So-called ‘financial sales’ may be good products, but regardless of the term ‘sale’ it is still worth checking the market to see if a better deal is available elsewhere,” says David Black from financial analyst Defaqto. “It’s also worth reviewing your existing deals on a fairly regular basis to ensure you’ve got the most appropriate deal for your circumstances.”
*All rates correct as of 7/1/11
