Skipton Mortgage and Savings Review – that will be the topic of today’s article.
Review the Skipton Mortgage and Savings offerings, exploring its effectiveness in comparison with the insights discussed in the Novia Global Review.
Before beginning it is worth pointing out that I have continuously mentioned the negatives about receiving tiny amounts of interest in the bank, and the fact that property doesn’t beat stocks long-term.
Nevertheless, my staff have looked at some of the positives, as well as negatives, associated with these kinds of mortgages and saving accounts.
If you want to invest in more productive assets, don’t hesitate to contact me, email (advice@adamfayed.com) or use the WhatsApp function below.
Introduction:
What is a savings account? – A Savings Account is a deposit account, which lets individuals gain profits in the form of interest that has been derived from the deposit made by them.
Savings accounts are stable and secure, which makes them a popular investment option among other types of investment vehicles.
People who want to have steady returns would opt for savings accounts, as the interest accumulated from savings accounts is quite low compared to the returns acquired from other forms of investments such as stocks.
Mortgage – A mortgage is nothing but a loan, which is used for the purchase of a property or for maintaining it, and the acquired loan should be repaid over a specific period of time.
In general, the property in which a person is building a house or making renovations is kept as collateral for obtaining the mortgage.
There are different types of mortgages, among which the most commonly known types are standard-rate mortgages and adjustable-rate mortgages.
There are numerous factors influencing the cost of a mortgage such as the time for repayment, type of loan, interest rate, additional charges, etc.
Fixed-rate mortgage – This is the most common type of mortgage, where the interest rate and the monthly payments remain the same throughout the course of a mortgage.
Adjustable-rate mortgage – This is the type of mortgage, where the interest rate is set for the initial period, and after that, the rates might vary on the basis of the interest rates in the market at that time.
The initial interest rate might be set lower than the actual market interest rates, but in the long-term, it will be a burden because of the changing interest rates.
Usually, adjustable-rate mortgages have limits or caps on how much the interest can be raised according to the timeframe over the life of the loan.
Skipton International – Skipton International is an offshore bank, which mainly specializes in providing services related to mortgages and savings accounts.
It has been estimated on the basis of the stats obtained from the employees in the past that Skipton International has an employee count of around 120, and the revenue is approximately around $22 million.
There have been numerous companies that were acquired by Skipton International or made into subsidiaries such as Hatched.co.uk Ltd, Holmesdale Building Society, PULLIN ROSE LIMITED, and others.
The headquarters of Skipton International is located at 4 King Edwards Ct, Sutton Coldfield, West Midlands, B73 6AP, UK.
Skipton International is a subsidiary of Skipton Building Society and is completely owned by it. Skipton Building Society happens to be the 4th largest building society all over the United Kingdom.
If Skipton International was considered a building society, regardless of Skipton Building Society, then it would come around as the 13th largest building society.
As of 2019, the stats of Skipton International are as follows:
Savings Balances – £1,645 million
Mortgage Balances – £1,437 million
Capital – £86 million
Total Assets – £1,743 million
Total Income – £28.9 million
Expenses – (- £7.7 million)
Profit before income tax – £21.2 million
Income Tax – (-£2 million)
Total Profit – £12.4 million
The services of Skipton International are offered to individuals living in the Channel Islands, expats of the UK, and the citizens of most other countries of the world.
However, there are many countries from which people cannot be able to acquire the financial products and services of Skipton International. They are as follows:
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Depositor Protection – Skipton International is said to have a lower amount of risk. The majority of the funds of the depositors are invested in prime mortgages in order to avoid risk factors.
Moreover, the bank holds enough funds to repay depositors, whenever necessary, based on the extreme economic conditions.
As for the deposits of the savers, all the money is invested in the name of Skipton International. Not only that, but Skipton International does not upstream deposits to its parent company.
Skipton International acquires its banking license in Guernsey and is a participant in the Guernsey Banking Deposit Compensation Scheme.
According to this scheme, qualifying deposits are offered with protection for an amount of up to £50,000 under certain terms and conditions.
The maximum amount, which can be compensated in this way is around £100 million in a respective 5-year period.
However, Skipton International is protected by the Financial Services Compensation Scheme. Usually, it would have been great if it were.
Having said that, we will now have a look at the services and products offered by Skipton International and see whether they are beneficial to a person or not.
Offshore Savings Accounts:
Skipton International offers some of the best types of offshore savings accounts, which are proven to be having interest rates that are higher than most of its peers.
The interest for the offshore savings accounts offered by Skipton is provided in Sterling, which is for the Notice accounts, Easy Access accounts, and offshore Fixed Rate accounts.
As for the long-term fixed-rate accounts, there is an availability of choosing between monthly and yearly options. Whether it is for saving as a mode of investment or securing it for the future, the offshore account is the best option.
Skipton International is able to cut down its costs as it does not have any additional branch network. These benefits would be passed on to the depositors in the form of interest they get.
Skipton International claims that the interest rates offered by them are some of the best when compared to most other rivals in this respective field.
The primary objective of Skipton International is to offer top-notch services to British Expatriates, while these services can be acquired by citizens belonging to more than 100 different countries.
As claimed by Skipton, the services related to offshore savings are offered in such a way that the people (especially expats) are able to get access to straightforward services, which are hard to get for most expats.
How to apply? – People who want to get access to the services of Skipton International are required to follow the step-by-step procedure given below.
- First of all, choose the type of savings account that is suitable for your needs.
- Individuals that are opening offshore savings account with Skipton International for the first time should make sure that they complete an online savings application form.
- Existing customers can go for the additional account opening form.
- Gather all the necessary documentation, i.e., identity proof such as passport and address proof such as utility bill.
- Select your mode of payment for depositing funds into your offshore savings account. Usually, this can be done using various modes of payment such as BACS, CHAPS, SWIFT, etc.
- All the supporting documentation and the completed application form should be sent to Skipton using post.
- After Skipton receives your application, verifies it, and thinks everything is okay, your account will be opened.
For example, let’s say you wanted to make an initial deposit with the help of a cheque and post it along with your documentation. For some unknown reason, if your application gets denied, your cheque will be returned.
Withdrawals from Skipton offshore savings accounts can only be made to bank accounts that are under the name of the respective customer, and there is no option for making third-party payments.
Most people might face difficulties while sending original copies of their identity proof or address proof to Skipton. In order to deal with this issue, Skipton also allows verification via video calling or email.
People from some countries might not be allowed to open an offshore account with Skipton International, which has been mentioned earlier in this article.
- Fixed-Rate Bond (Maturing on 15 March 2022):
This is an offshore account of Skipton International, which is known to provide a guaranteed fixed rate of interest until the maturity period. People who won’t be needing access to their accounts can opt for this type of account.
The opening balance for this account is £10,000, which is a mandatory requirement. The maximum amount of money that can be deposited within this type of account is £5 million. This fixed-rate bond is in effect from 11 January 2021.
The annual rate of interest provided on this account is 0.80%
- International 90 Day Notice Account:
This offshore account is suitable for private investors, while sterling accounts are available for corporate customers, trust companies, pension schemes, etc.
The minimum deposit amount for this type of account is the same as the fixed-rate bond, which is £10,000 while the maximum that can be deposited is £5 million.
As for the interest, the interest offered with this account is 0.60%. This account is in effect from 11 January 2021.
As this is a notice account, people who wish to withdraw their funds would have to inform 90 days prior to their withdrawal.
- International Call Account:
The minimum deposit amount for this type of account is the same as the fixed-rate bond, which is £10,000 while the maximum that can be deposited is £5 million.
This is the type of account that offers easy access to the funds of the customers, and the interest is credited annually on the 1st of September.
The interest on this type of account is 0.40%, which is low compared to the other two accounts, but it comes with the advantage of easy access to the funds.
Interest for these accounts – The interest rates might vary by the time you are reading this article, but these are the accurate interest rates as of the time we are presenting this article.
For all the above-mentioned accounts, the interest starts 3 days after a person deposits their funds in an account, which can be with a cheque or any other payment method.
Mortgages:
There is an availability of various types of mortgages within Skipton International, which will be discussed below in detail.
Guernsey Mortgages:
As we discussed, mortgages allow people to take care of various types of property needs. At Skipton International, there is an availability of three types of mortgages namely Guernsey Mortgages, Jersey Mortgages, and Expat Mortgages.
- Guernsey Mortgages:
Within guernsey mortgages, there are a few types of mortgages, which may be suitable for you based on all of your requirements.
Choosing a Guernsey mortgage based on your needs is the most essential part while opting for Skipton International.
People who want to buy a property in Guernsey or looking to remortgage their property can choose this service. As Skipton International is a company that offers products to individuals, people can get mortgage products that are tailored to their needs.
- Guernsey Base Tracker Mortgage:
The minimum amount of loan that can be obtained with the help of this mortgage is £100,000 and the maximum loan offered to an individual would be £3 million.
Interest rates may vary on a daily basis, and the person is required to pay the interest in advance using direct debit on the first day of every month.
If the loan amount is around 70%, then the pay rate will be 1.99% (with a base interest rate along with 1.89%). The annual interest rate would be 3.63% with no additional fees. If a person wants to pay earlier than the term, there would be a fee of 3%.
If the loan amount is around 70.1% to 80%, then the pay rate will be 2.49% (with a base interest rate along with 2.39%). The annual interest rate would be 3.76% with no additional fees. If a person wants to pay earlier than the term, there would be a fee of 3%.
If the loan amount is around 80.1% to 85%, then the pay rate will be 2.99% (with a base interest rate along with 2.89%). The annual interest rate would be 3.89% with no additional fees. If a person wants to pay earlier than the term, there would be a fee of 3%.
If the loan amount is around 85.1% to 90%, then the pay rate will be 3.49% (with a base interest rate along with 3.39%). The annual interest rate would be 4.03% with no additional fees. If a person wants to pay earlier than the term, there would be a fee of 3%.
All of these rates and terms are in effect from 21 January 2021.
- Guernsey 5-year fixed-rate mortgage:
Similar to the above-mentioned mortgage, the minimum amount of mortgage, as well as maximum amount, are the same.
If the loan amount is around 70%, then the pay rate will be 2.24%. The annual interest rate would be 3.43% with no additional fees. If a person wants to pay earlier than the term, there would be a fee of 5%.
If the loan amount is around 70.1% to 80%, then the pay rate will be 2.94%. The annual interest rate would be 3.71% with no additional fees. If a person wants to pay earlier than the term, there would be a fee of 5%.
If the loan amount is around 80.1% to 85%, then the pay rate will be 3.39%. The annual interest rate would be 3.90% with no additional fees. If a person wants to pay earlier than the term, there would be a fee of 5%.
If the loan amount is around 85.1% to 90%, then the pay rate will be 3.74%. The annual interest rate would be 4.04% with no additional fees. If a person wants to pay earlier than the term, there would be a fee of 5%.
When a person wants to pay a lumpsum amount before the end date, the payments can be made without any charge every year for an amount up to 10%. This feature can be rolled over to the next year if the person does not opt for the prepayment of the mortgage.
- Guernsey Standard Variable Rate Mortgage:
The minimum amount for a mortgage, as well as the maximum amount that can be acquired, can be the same as the other two mortgages.
The interest will be calculated on a daily basis and should be paid with the help of direct debit every month on the 1st.
If the loan amount is around 90%, then the pay rate will be 4.99%. The annual interest rate would be 5.2% with no additional fees. If a person wants to pay earlier there would be no fees unless property involvement.
- Guernsey Housing Association Mortgage:
The minimum amount of loan that can be acquired is £90,000 and there are no early repayment charges until the end of the term.
The loan amount is around 40% to 80%, then the pay rate will be 3.75%. The annual interest rate would be 4.05% with no additional fees.
- Guernsey Next generation Mortgage:
The guarantee for this mortgage will be taken in the form of a bond such as a family house. The collateral will be equivalent to 20% of the actual market value of the property.
The interest rate is 4.24% and is a fixed rate until 31 March 2026. The customers would have to pay the cost of the valuation of the security and the guarantor’s property.
- Guernsey Buy-To-Let Mortgage:
This is a mortgage offered to people who are looking to buy a property on a buy-to-let basis.
If the loan amount is up to 70% within a 3-year period, then the pay rate will be 3.39% (with a base interest rate along with 3.89%). The annual interest rate would be 4.95% with no additional fees. If a person wants to pay earlier than the term, there would be a fee of 3%.
If the loan amount is up to 70% within a 5-year period, then the pay rate will be 4.49%. The annual interest rate would be 5% with no additional fees. If a person wants to pay earlier than the term, there would be a fee of 5%.
The minimum loan amount is £100,000 and the maximum limit is £3 million. The rental income for acquiring this mortgage should be around 125%.
Jersey Mortgages:
Jersey Mortgages are also available in various terms such as the Guernsey Mortgages with similar terms and conditions, and the interest rates are as follows.
- Jersey Base Tracker Mortgage:
The loan amount is around 70% to 90%, the pay rates are from 3.63% to 3.49% while interest rates vary between 3.63% to 4.03%.
- Jersey 5 Year Fixed Rate Mortgage:
The loan amount is around 70% to 90%, the pay rates are around 2.24% to 3.74%, and the interest rates vary between 3.43% to 4.05%.
- Jersey Standard Variable Rate Mortgage:
The loan amount is up to 90%, the pay rate is 4.99%, and the interest rate is 5.2%.
- Jersey Next Generation Mortgage:
The applicants must earn at least £30k per annum, while joint applicants must earn at least £40k per annum.
The collateral may be taken in the form of a bond on the suitable property in Jersey, while the fixed interest rate is 4.24% until 31 March 2026. The collateral will amount to 20% of the value of the property.
- Jersey Buy-To-Let Mortgage:
The loan amount is 70% for a 3-year period and a 5-year period.
For a 3-year period, the pay rate is 3.99%, which includes a base rate along with 3.89%, while the annual interest rate is 4.95%. There are no additional fees, but the early repayment charges are around 3% until the end of the term.
For a 5-year period, the pay rate is 4.49%, while the annual interest rate is 5%. There are no additional fees, but the early repayment charges are around 5% until the end of the term.
The minimum loan amount for both terms is £100,000 and the maximum limit is £3 million.
Expat Mortgages:
Expats could obtain mortgages that are for a 3-year period and a 5-year period, which are fixed-rate buy-to-let mortgages.
- 3-year tracker UK
This type of mortgage is available for purchases as well as re-mortgages at Skipton International. The minimum amount of loan that can be acquired is around £100,000 while the maximum that can be obtained £3 million.
Upon the completion of the tracker period, the interest rate would automatically revert to Skipton’s Buy-To-Let Follow on Rate. This mortgage at Skipton can only be acquired for buying a new property in the UK.
Repayments made up to 10% might be eligible for an early repayment charge, other than that, there won’t be any sort of early repayment charges.
For a 3-year period, if the loan amount is 70% (minimum £750,000), the pay rate is 2.49% (with a base rate along with 2.39%), while the annual interest rate is 4.53%. There are no additional fees, but the early repayment charges are around 3% until the end of the term. There is a fee of £2,999 for purchased properties with this account, while there are no re-mortgage fees and valuation fees.
For a 3-year period, if the loan amount is 70% (minimum £250,000), the pay rate is 2.99% (with a base rate along with 2.89%), while the annual interest rate is 4.67%. There are no additional fees, but the early repayment charges are around 3% until the end of the term. There is a fee of £2,999 for purchased properties with this account, while there are no re-mortgage fees and valuation fees.
For a 3-year period, if the loan amount is 70% (minimum £100,000), the pay rate is 4.24% (with a base rate along with 4.14%), while the annual interest rate is 5.02%. There are no additional fees, but the early repayment charges are around 3% until the end of the term. There is a fee of £2,999 for purchased properties with this account, while there are no re-mortgage fees and valuation fees.
- 5-year tracker UK
This type of mortgage is available for purchases as well as re-mortgages at Skipton International. The minimum amount of loan that can be acquired is around £100,000 while the maximum that can be obtained £3 million.
Upon the completion of the tracker period, the interest rate would automatically revert to Skipton’s Buy-To-Let Follow on Rate. This mortgage at Skipton can only be acquired for buying a new property in the UK.
Repayments made up to 10% might be eligible for an early repayment charge, other than that, there won’t be any sort of early repayment charges.
For a 5-year period, if the loan amount is 70% (minimum £750,000), the pay rate is 3.24%, while the annual interest rate is 4.46%. There are no additional fees, but the early repayment charges are around 3% until 31 March 2026. There is a fee of £2,999 for purchased properties with this account, while there are no re-mortgage fees and valuation fees.
For a 5-year period, if the loan amount is 70% (minimum £250,000), the pay rate is 3.74%, while the annual interest rate is 4.67%. There are no additional fees, but the early repayment charges are around 5% until 31 March 2026. There is a fee of £2,999 for purchased properties with this account, while there are no re-mortgage fees and valuation fees.
For a 5-year period, if the loan amount is 70% (minimum £100,000), the pay rate is 4.99%, while the annual interest rate is 5.22%. There are no additional fees, but the early repayment charges are around 5% until 31 March 2026. There is a fee of £2,999 for purchased properties with this account, while there are no re-mortgage fees and valuation fees.
What we think:
Based on the stats that we have obtained from various websites, keeping all the factors in mind, Skipton International is around 4% to 4.5% in its overall rating.
There is a long list of countries, from which people might not be able to acquire the services of Skipton International. Other than that, there are some other features, where it lacks its superiority.
However, when we consider the overall features and the abilities of Skipton International, it can be an excellent offshore service provider (especially for British expats).
Not only that, but the interest rates offered by Skipton International are comparatively lower than others and the offshore account interest rates are a bit higher than what people might anticipate.
If you are willing to acquire the services of Skipton International, you can go ahead as there is no need to worry regarding the disadvantages (because the advantages overweigh them).
That being said, if you need a person to take care of all of your financial needs such as investment advice, wealth management needs, etc., you can avail of the best-in-class financial services offered by us.
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Adam is an internationally recognised author on financial matters, with over 233 million answers views on Quora.com and a widely sold book on Amazon
