Available at 4.49 per cent, the product is fully flexible and has no higher lending charge and is available up to 95 per cent loan-to-value (LTV). An arrangement fee of £495 exists on the product, with an exclusive fee of £75. Borrowers are also given the option of a 'drop lock' facility.
Announcing the deal, Ray Boulger, senior technical manager at John Charcol, said: “With the upward movement in swap rates over the last month or so, fixed rates really have become uncompetitive, and those that offer 95 per cent LTV with no higher lending charge are even more so. This product, although not a fixed rate, does have a drop lock facility and so borrowers can move into a fixed rate should they need to at any time. Of course, the product would be good with just these features, but the rate is also highly competitive and allows first timers to pay that little bit less to start with which can be all important.”
Designed to redress the shortage of FTBs in the market, the product has been designed for buyers who have a deposit of between 5 and 10 per cent of the property price. An early repayment charge of 1 per cent exists during the stepped period, with the ability to repay 10 per cent per annum, without incurring an early repayment charge.
Sheridan Bradley, mortgage adviser at Lodemead, admitted the range would appeal to some FTBs. She said: “I don’t tend to use stepped rate products as borrowers can get into difficulties when the rates change, but the ability to switch is good. The rate is also quite competitive.”
