AA Mortgages was a relatively new mortgage lender in the UK mortgage market. AA mortgages were provided from the AA brand who dealt with the roadside recovery of your vehicles during a breakdown.
AA mortgages have since shut down its operations and are no longer accepting any new mortgage applicants leaving many in fear of what will happen to the current group of people who have AA mortgages.
The mortgage market was becoming very competitive and this, in turn, led to the demise of the AA mortgages.
AA mortgages offered a range of fixed-rate and standard variable-rate products which mostly came with a loyalty bonus.
AA Mortgages launched in 2016, offering fixed-rate, standard variable-rate and interest-only deals. All of its products were underwritten by the Bank of Ireland.
The annual loyalty bonus, equating to 0.1% of your mortgage balance was what the AA tried to use to win over more consumers than its competitors. It also had some good cash back offers with some of its products.
What types of mortgage did AA Mortgages provide?
Fixed-rate mortgages: There was a wide range of fixed-rate mortgages available with 2, 3 or 5 year fixed terms. These mortgages were available for both first-time buyers and home movers.
Fixed rate mortgages are good as they provided the borrowers with a degree of certainty over their fixed term.
Standard variable-rate mortgages: There was also a range of standard variable rate mortgages but those rates were not set by AA mortgages but rather by the bank of Ireland’s SVR rates.
Interest-only mortgages: There was also a range of interest-only mortgages. With interest-only mortgages, you will pay only the interest portion of your mortgage as your monthly repayments and then the Capital will be repaid in one large sum at the end of the mortgage term. AA mortgages would have had to approve your repayment plan for the capital.
AA Mortgages would have required you to have at least 40% equity in your property, worth at least £250,000. You can also choose a half-repayment, half-interest-only mortgage if you have at least 25% equity, with the property worth at least £250,000.
Remortgages. All the products mentioned above were also available for those looking to remortgage.
What bonuses are available?
AA Mortgages encouraged customer loyalty by offering an annual bonus throughout the lifetime of your mortgage. The bonus equated to 0.1% of your mortgage balance. It’s paid every year, on the anniversary of your mortgage start date. You can choose to take this bonus as cash or as a mortgage overpayment.
AA Mortgages also offered a cashback on some of its products which you would have received after your mortgage application was approved.
Eligibility criteria for AA mortgages
When AA mortgages were offered you would have been asked to meet the following eligibility criteria:
- UK resident.
- Aged 18 or over.
- Have a UK bank account.
- Annual household income of at least £20,000.
- No history of bankruptcy or property repossession.
How can I contact AA Mortgages?
AA Mortgages are no longer available for applications but can be reached by calling 0800 169 6010. Phone lines are open 8.30am-8pm on weekdays and 9am-2pm on Saturdays.
How do I apply for an AA Mortgage?
As AA mortgages are no longer available you will not be able to apply for an AA mortgage.
If you currently have an AA mortgage then you should contact them with the details below or through their website.
If you are considering getting a mortgage then using a mortgage broker may be a good choice as mortgage brokers usually have access to many more products than any specific mortgage lender.
Mortgage brokers will also usually have access to specific deals from mortgage lenders as well as experience on which mortgage lenders will be more likely to accept your case. This will help you avoid getting rejected on a mortgage application and having to build credit due to the damage a rejection might do to your credit score.
If you have bad credit or are self-employed then specialist mortgage brokers such as bad credit mortgage brokers or self-employed mortgage brokers may be useful.
You may also want to consider the government schemes which are available for first-time buyers and home movers such as:
- Lifetime ISA- gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
- Help to buy ISA- gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000
- Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75% after the fifth year and 1% plus RPI for every year thereafter.
- Shared ownership- You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
- Armed forces help to buy- similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
- Rent to own- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
- Right to buy- allows you to buy your home at a discount price.
- Preserved right to buy- same as above.
- Right to acquire- same as above.
Disclaimer: The offers compared on this page are chosen from a range of products Huuti has access to track details from and is not representative of all the products available in the market. Unless indicated otherwise, products are displayed in no particular order or ranking. The use of terms “Best”, “Top”, “Cheap” including variations, are not product ratings and are Huuti is not recommending anything here. You should consider seeking independent financial advice when necessary and confirm the validity of the information above for your personal circumstances. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP YOUR MONTHLY REPAYMENTS