Who hasn't spent some of their time during the working week dreaming of lying on a sun swept white sand beach in the Caribbean?
So, how would you feel if just by getting a mortgage, you could end up going to Barbados?
No, we haven't spent too much time sniffing the laughing gas; it's true!
Many of us are familiar with mortgages that offer us a free valuation or some help with our legal fees; but what would you say about a mortgage that gives you a free return flight to Barbados?
Lloyds TSB has just come up with a mortgage that can also help you escape from the credit crunch; literally.
They have just launched the Airmiles Mortgage. It is a 3 year fixed rate mortgage where you get 6,000 air miles up front, and then earn more each time you make a monthly repayment.
Lloyds TSB insists the deal is not a gimmick, saying it is competitively priced (rates begin at 5.89%) and allows you to earn decent rewards on your essential spending, so it seems like a good mortgage deal even without the added air miles.
This new mortgage by Lloyds TSB marks the second stage in the partnership between the bank and the Airmiles loyalty scheme, which had previously had a long relationship with NatWest.
Environmentally friendly?
However, a mortgage that helps you add to your carbon footprint will naturally cause some consternation; it's not exactly the greenest mortgage in the world!The most green minded of you would not want to touch a mortgage that comes with free flights attached. If you are looking for an environmentally friendly mortgage the main green name is the Co-operative Bank, which funds several Climate Care projects across the world on behalf of its mortgage customers.
What do I get for my Airmiles?
When your 3 years are up, you will have accrued around 7,800 air miles. Lloyds TSB says you can use your miles on a wide range of rewards, including:
- One return flight to any "zone four" destination including Barbados, Hong Kong or Delhi
(
In fact, as zone four flights "cost" 6,000 air miles, you would be able to jet off and leave the credit crunch far behind shortly after you've taken out the mortgage. And at the end of the 3 years, you would still have 1,800 air miles to play with!)5 return flights to a list of locations including
Rome,
Prague and
Barcelona, (
1,500 air miles per return flight)
- 19 haircuts at a top salon (400 air miles per haircut)
- 6 trips to the theatre, with dinner for two people (1,250 air miles per trip)
- 10 cases of deluxe wines (750 air miles per case)
Alternatively, a family of four could enjoy all of the following activities: a day out at Newmarket races, a tour of the Manchester United stadium, a dolphin-watching session and a day at Legoland ,and still have enough left for the parents to enjoy return flights to Paris a spokeswoman says.
Is this mortgage a good deal?
If you opt for this deal, you get 6,000 air miles on completion of your mortgage, and will earn an additional 50 miles each month for the life of the fixed rate
If you want to get the rate of 5.89%, the maximum you will be able to borrow is 75% of the property's value, and you must pay a £995 product fee. The rate goes up to 6.19% if you need to borrow more than 75% (up to a maximum 90%).
The bank has included an option of paying no product fee, but then the rates are 6.19% and 6.49% respectively. There are early redemption penalties for three years (until June 30, 2011).
The rate on the mortgage is pretty competitive, if not the very best. As a comparison, HSBC has a 3 year fixed rate mortgage at 5.53% with a £999 fee and a 10% minimum deposit requirement (there may be lower rates for some existing HSBC customers).
Comparison website MoneyExpert.com gave the deals the thumbs-up, saying the market average for 3 year fixed rate mortgages of this type is 6.44%.
Meanwhile, moneysupermarket.com said: "This is a great product for cash-strapped Brits in need of a little help to go on holiday, but only if the product is suitable for them and they are able to take advantage of the rewards scheme."
So, does getting a mortgage that allows you to go on holiday a good idea or do you think it's just another marketing gimmick?
Why not let us know in the comments?
(Please note that articles on Money Hospital do not constitute regulated financial advice. The articles are intended to provide general personal financial information. We urge you to consult an Independent Financial Adviser (IFA) before making any important decisions about your finances. All rates are correct at time of printing but are subject to change without notice)
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