Personal Finance: Tailor-made home deals

THE idea of a standard mortgage rate for all borrowers is on the wane and may soon be dead.

Larger loans already bring a lower rate, and the best deals are only on offer to those with larger deposits.

But things are set to go much, much further. The Skipton Building Society is already giving a 0.15 per cent discount (well, every little bit helps) to borrowers who have a clean credit history, have been in continuous employment for 12 months, and are borrowing no more than twice a couple's joint income.

Other building societies are looking hard at ways to predict those who will be good payers and entice them aboard with keenly priced deals. Of course, those with a blemish on their credit record will find it more and more difficult to get a mortgage.

It will be much less socially acceptable to dip into the statistics and divide the good payers from those who get into arrears by reference to other factors.

On average, single mothers may have more problems, or people without academic qualifications, or even redheads. But how would you like your financial affairs to be dictated by the fact that you belong to one of these groups?

When it comes to insuring the contents of our homes, we have had to accept that the postcode will dictate the price. That postcode gives a risk rating, because it is a possible pointer to where certain social groups live, and the way they lead their lives.

But not so many years ago, building societies had to retreat from their policy of 'redlining' certain areas - designating them so full of unruly payers and shoddy housing that they would refuse to lend to anyone living in them.

People want more individual treatment, and they want the decisions to be seen to be fair using acceptable yardsticks.

Life is getting increasingly bumpy. People will have to accept that they are going to have times in work, times doing part-time or contract work and periods with no work - and mortgages are going to have to take account of these ups and downs.

The plethora of discount loans that give borrowers a year or two at cheap rates are a way of helping first-time buyers to get established. But the nanny tendency would say that the sudden shock of having to pay the full rate is storing up trouble - never mind that most of these loans have variable rates, which always carry the risk of rates steaming away.

National & Provincial Building Society has started to explore more flexible mortgages. Its first deal gives young couples nine months at a discount followed by a three-month payments holiday - designed for the financial ups and downs of new parenthood.

While lenders move towards bespoke loans, individuals can try to take control by getting ahead during the good years - by shortening the term of the loan - and hoping that they will meet understanding in the lean years.

A SMALL tale to illustrate the horrible complexity of even the simplest financial transaction: A saver with pounds 9,000 to spare put the cash into a Nationwide Tessa feeder account, which would put the money into his Tessa each year over its five-year life.

The Nationwide slipped up by adding this account to a list of those where the savers had applied for gross interest by declaring themselves to be non-taxpayers.

The Inland Revenue then pounced - quite rightly - but wrongly retreated, saying that as it was a Tessa account no tax was due.

Of course this was only a feeder account, so full tax had to be paid. Only the Tessa itself is tax-free.

The end result was that the Nationwide bravely admitted its error and is generously paying the tax due.

But it is worrying that the Revenue could make such a basic mistake.

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam