The Financial Blog

Lloyds TSB have launched an Airmiles mortgage product. Obviously you can earn Airmiles with this mortgage product but it seems like a decent fixed rate mortgage aside from all the marketing gimmicks.

The basics of the Airmiles package is that you earn 6000 Airmiles upfront and then 50 Airmiles for every monthly mortgage payment you make. The product is available from today and the Airmiles will be offered accross a range of 3 year fixed rate mortgage deals from Lloyds TSB. The interest rates start at 5.89 per cent.

Director of network mortgage sales at Lloyds TSB, Alison Burns, said: “This new deal combines some of our most competitive rates, with a genuinely useful reward package. We all enjoy the idea of getting something for free and in a time when mortgage payments are a top priority, this offer enables customers to earn rewards on their essential spending.”

Over the three year fixed period customers could earn approximately 7800 airmiles. Collectors can use their airmiles on a range of rewards, including the following:

• A return flight to any zone four destination, including Barbados, Hong Kong or Delhi (6000 airmiles)
• Five return flights to Barcelona Rome or Prague (1500 airmiles per return flight)
• 19 haircuts at a top salon (400 airmiles per haircut)
• Six trips to the  theatre, with dinner for two people (1250 airmiles per trip)
• 10 cases of deluxe wines ( 750 airmiles 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, a day at Legoland and there would still be enough left for Mum and Dad to enjoy return flights to Paris.

Customers can also benefit from a 100 airmiles bonus if they choose to take out Lloyds TSB combined contents and buildings insurance in conjunction with their mortgage.

Sean Gardner, founder of MoneyExpert.com commented: “At first glance you could be forgiven for thinking Lloyds TSB had just launched a mortgage laden with gimmicks. The product is called the “Airmiles Mortgage” and they openly suggest a family of four could benefit from a dolphin watching session or at a trip to Legoland once the three-year period on the mortgage has expired.

“But this is a genuinely good deal and the rewards on offer are nice and simple to redeem. 7,800 airmiles is worth plenty and should not be ignored in the final reckoning if you’re choosing a mortgage.

“Of course, nobody would advise that you selected your mortgage provider based on how many flights to Rome, cases of wine or free haircuts you’ll get. But with a rate of 5.89 per cent over three years the Airmiles mortgage is amongst the most competitive. The market average for three-year fixed rate deals of this type is 6.44 per cent.

“And anything that eases the financial pressures on homeowners is to be welcomed. Lloyds TSB has included an option of paying no upfront application fees if you’re short of cash, which at least gives you a range of options if you’re thinking of applying.”

Louise Cuming, head of mortgages at 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. It’s impressive they have shown enough initiative to deliver a deal with good rates and a rewards package that will actually be useful for many people.

“However, with an interest rate of 5.89 per cent and a £995 arrangement fee you could get a cheaper mortgage deal from HSBC or Alliance and Leicester. It is also interesting to see Lloyds buck the growing green bandwagon by helping Brits add to their carbon footprint with these extra flights.”

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This entry was posted on Wednesday, May 7th, 2008 at 3:50 pm and is filed under Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.