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Coventry Building Society Mortgages

The modern financial landscape is made up of many thousands of different businesses, each with their own distinct identity and individual history. Some of these, like Barclays Bank, are enormous multinational corporations built up from a single goldsmiths, but others have roots firmly planted in their communities. Coventry Building Society is one such organisation, a building society which prides itself on maintaining links to the past rather than discarding its heritage.

Staying relevant throughout the centuries whilst retaining a sense of local identity is no mean feat, and balancing the demands of modern business with the insatiable demand for progress can leave many businesses unable to compete. For Coventry Building Society, however, continuing to provide their customers with a relatable, personal service is important enough that they’ve made it a central part of their company philosophy. Over the years, though the landscape has changed around them, Coventry have managed to keep customer values at the core of their business practises, making them a stand-out building society within the financial sector.

Coventry Building Society History

To understand what makes Coventry Building Society different, we first need to understand where they’ve come from, and what sets them apart from their competitors. In the modern age, building societies are almost interchangeable with banks; both offer similar products, and the difference is often only skin-deep. However, building societies have their origins in a very different sort of organisation; a co-operative group for creating affordable housing.

Building Societies have their roots in the late 18th Century, in cities like Birmingham. Thanks to the rapid expansion of small businesses, there was a proliferation of individuals seeking to invest in property; many people had become sufficiently wealthy that they could, for the first time, afford to build their own homes. Members’ money would be pooled into a large central fund, then used to finance the building of houses for all members. Once completed, these houses would be used as collateral to attract even more funding, meaning that progress was exponential and every member could reliably secure a loan for their new home. Once every member had a house, the society would be closed down.

Over the next century or so, building societies became so popular that nearly every town had its own set of building societies. Local residents would pay in, and once the houses were constructed they could then move in to their new home. Unfortunately, with so many building societies around, many began to expand and take over smaller organisations – mergers became rife, and many larger building societies snapped up dozens of smaller ones. This led to unscrupulous society managers attempting to take advantage of this opportunity for personal gain, by inflating the value of their building society in the hope of attracting the attention of a larger one. Once bought, the manager of the society could expect a handsome pay out, and this led to a general fall in the popularity of building societies across the UK.

Since the golden age of building societies, many building societies have become “demutualised”, where the co-operative relationship between depositor and society was removed, and the society became, in essence, a bank. The key difference between a bank and a building society is that a bank is privately owned, and funded by shareholders. These shareholders own a stake in the company, and are entitled to receive annual dividends for the shares they hold – this means that a bank will always need to ensure that it’s making enough of a profit to satisfy its shareholders as well as meeting operating costs. A building society, on the other hand, is funded entirely from the deposits made by members – because there are no shareholders to repay, the society can afford to focus less on profits and more on providing a high-quality service for its customers. Practises which would be prohibitively expensive or uncompetitive for a bank can still make up a building society’s activities, because they don’t need to worry about keeping their shareholders happy – there aren’t any.

Many building societies fiercely resist the pressure to demutualise – Coventry Building Society has remained staunchly independent since its founding in 1884, and despite the pressures of modern trading has found that its focus on core customer values has continued to bring it sufficient business to grow and thrive.

Coventry Building Society Values

Coventry Building Society was founded towards the end of the 19th Century, when building societies were still very popular and widespread. Within just 30 years, Coventry became the largest building society in the county by asset share, a remarkable feat for such a young business. Over the course of the next century the building society continued to grow, culminating in 1983 with its merger with the other main local building society, the Coventry Provident. In the 30 years since then, Coventry Building Society has proven that it’s more than able to compete with high street lenders, with 1.7 million clients and combined assets of more than £34 billion. This makes Coventry Building Society the third-largest society in the UK, marginally smaller than the Yorkshire Building Society (at £38 billion) but still a long way behind the mammoth Nationwide (£208 billion).

But what makes Coventry different from the many other lenders available on the market? The key distinction between how Coventry operates and how a high street bank operates is that the relationship between society and customer is very different. A high street bank will always see depositors and borrowers as customers; they’re trying to sell their services at the best price, and will do whatever they can to make a sale. However, with Coventry Building Society, the relationship is much less one-sided – anyone who makes a deposit with the building society is automatically one of the owners. They’re contributing the funds which the building society needs to continue operating, and as such, the relationship is a lot more balanced. Coventry Building Society makes sure to point out on their website that member’s views are very important, and that everyone has an equal say, no matter how much they’ve deposited:

As a member, you share our success through great value products - whether you're a saver, a borrower, or both. So, whether you have £100 or £100,000 with us, you'll enjoy the same great service.

Coventry Building Society Mortgages

Securing a mortgage for a property is always a daunting procedure. It’s serious business, trying to work out what the best offer is, and the enormous amount of choice available means that borrowers can often feel like they’re swamped; is a two-year fix the best deal, or would a five-year tracker be more appropriate? Could I save more with an offset loan or with a variable rate? Choice is useful, but sometimes it can also be overwhelming. That’s why Coventry have considerately divided their mortgage products into different sectors, based on the customers they’ll likely appeal to. This helps new customers navigate their website with ease, finding the deals which best suit them without having to dig through confusing menus and sheaves of near-identical offers.

First-Time Buyers:

The first time you buy a house is the most difficult. Without any first-hand experience of what to expect, buyers are constantly stepping in to the unknown; every experience is a new one, and weighing up options is very difficult. Coventry Building Society offer a wealth of options for first-time buyers, which will help them to secure the mortgage plan which best suits them. Here are some of the questions a first-time buyer will need to ask themselves, when looking at the loans offered by Coventry:

  • Fixed or Flexible? The interest rate payable on a mortgage is commonly defined by whether it is “fixed” at a certain rate, or whether it can be varied from one year to the next. As with a regular loan, a fixed interest rate allows for a degree of stability for the homeowner, since they always know what their mortgage bill is going to be. However, this stability comes at a cost, as fixed-rate mortgages are typically marginally more expensive than their flexible alternatives. This reflects the fact that a flexible interest rate allows the lender to respond to market influences more easily than a fixed rate does; should prevailing conditions push the general rate of interest up, no lender wants to be stuck collecting interest at a fixed low rate. Conversely, of course, if interest rates should fall, then homeowners will be rewarded with cheaper interest rates and a lower mortgage bill.
  • Early Repayments? Because of the way a mortgage loan is structured, early repayments allow a homeowners to “get ahead of the game” and reduce their overall mortgage cost significantly. Of course, this relies on them having the ability to contribute a substantial portion of their earnings to repaying their mortgage quickly, but for many homeowners this is a valuable option. The ability to make early repayments isn’t available on every mortgage plan, however, and many stipulate that early repayments incur a substantial fee – this can often make it unreasonable to repay early. The option to make early repayments is always a valuable one, even though it might seem unlikely that it’ll ever be possible.
  • Deposit Size? One of the key factors in determining which mortgage a borrower will qualify for is the size of the deposit they can afford to put down. Borrowers who are in a position to make a deposit for a large percentage of the property’s value are typically offered the best interest rates, but for first-time buyers these high-value deposits are often out of reach. Coventry offers mortgages starting with a 10% deposit, which are expressed as “90% LTV” – this means that the loan makes up 90% of the value of the property; the “loan to value” is 90%. As the LTV decreases (and the deposit increases), the deals on offer typically become more favourable to the borrower, with lower interest rates, longer periods of fixed rates, and better terms.

Moving Home:

Not every house buyer is doing it for the first time, and Coventry provides a suite of products which are tailored precisely to the requirements of those who are in this position. These products consist of high-LTV mortgages, which reflect movers’ ability to invest more in their new property. These deals are tailored to allow people who are experienced homeowners to leverage their existing wealth into a better mortgage deal.

With these products, Coventry place their emphasis on the simplicity and straightforwardness inherent to their range; there’s no fancy sales talk, there’s no-one beating you over the head with their “latest offers” (which are the same ones they’ve been peddling for years); you’re simply presented with a set of options, given all the information you need to make a decision, and provided with contact information in case you have any questions. There’s no fuss, no bother, and you’re left to take care of business yourself. This is a refreshing attitude for anyone who’s dealt with the overly slick and impersonal sales patter of high street banks who can’t tell you enough about how transformative their products are.


Unhappy with your current provider? Looking for something more flexible, or more stable? Well, transferring your mortgage to Coventry Building Society isn’t nearly as tough as you might imagine; in fact, the services they offer can often take you from accepting the mortgage offer to completing the process in just 10 days – that’s remarkable, when you consider the sums involved! The types of mortgage on offer are similar to the terms which house movers are offered, and tend to reflect the situation of most existing homeowners; a higher level of equity generally means that these customers are able to afford the better deals that come with a large deposit, since their existing home payments have been used to increase their ownership of the property.

Coventry Building Society’s mortgage transfer team are able to handle all of the paperwork involved in transferring your mortgage to them, and will take all of the hassle out of making the swap to a new deal. Though there are certain situations in which a solicitor may be required, in general, the entire process can be handled in-house by Coventry’s team of experts, leaving you to focus on the things that matter most to you.

Buy to Let Mortgages:

The buy to let market in the UK is one of the most thriving areas of real estate. Despite the UK Government’s introduction of regulations to curb investment, the buy to let industry still remains a fast-growing sector of the marketplace. As such, demand for buy to let finance continues to grow, and Coventry Building Society offers a suite of products which are tailored to meet this demand.

The key differences between mortgages offered for residential properties and those offered for buy to let is the larger deposit that’s required; although residential mortgages can often be obtained with as little as a 5% deposit, a typical buy to let mortgage will require a 25% or 35% deposit. Coupled with the stringer requirements for obtaining funding, which stipulate a minimum level of private income and rental income, and the bar is set quite high for up and coming landlords. However, the deals which Coventry offer include a wide variety of repayment plans, including fixed term contracts and a series of loans with no early repayment fees. This can be very valuable for a landlord, as the option to pay off their mortgage quickly is often very useful when it comes to cashing in on their property.

Offset Mortgages:

The final type of mortgage offered by Coventry Building Society is the innovative offset mortgage plan. Typical mortgages restrict borrowers in that their ability to influence their repayments is limited; all the power lies with the lender, and they can raise or lower interest rates as they wish. However, with an offset mortgage, borrowers are able to reduce the total amount of mortgage which they pay interest on by “offsetting” their savings against it. What this means is that a homeowner could use their regular savings account as a way of reducing their annual mortgage payments; if they owe £150,000 on their mortgage, but have £20,000 in their savings account, the mortgage provider will only charge interest on £130,000 of their outstanding mortgage. This represents a substantial saving, and with interest rates at a historic low, could represent a real incentive for savers.

The real benefit which an offset mortgage offers to borrowers is that it gives them a choice of how they use their money; they can use their savings to minimise mortgage payments, but if they decide to take a holiday, buy a new car or make repairs to their home they can freely use their savings for that instead.

Coventry Building Society in the 21st Century:

As the new millennium marches on, the dizzying pace of progress seems to be alienating common people from the financial institutions in our country. However, organisations like Coventry Building Society prove that although the modern world is a fast moving place, there is still room for a business which listens to regular people.


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Registered office: 1 Mayfair Place, London, W1J 8AJ. Registered in England Number 8147460.