In addition to having no early repayment charges at any time the product allows borrowers to adopt a wait and see approach to their borrowings, by offering a drop-lock facility. This guarantees consumers the right at any time to drop into a fixed rate the lender is offering.
The product is flexible, allowing any overpayments to be used to make underpayments, or take a payment holiday. For remortgagers the deal is sweetened further with a refunded valuation fee (up to £405) and free legals.
Ray Boulger, senior technical manager at John Charcol, comments: “This mortgage would be the market leading ERC free 3-year tracker or discount even without any bells or whistles. It will particularly suit borrowers who need a new mortgage now and like the idea of having a fixed rate, but would prefer to take one when they consider the time is right, rather than when they happen to need a new mortgage. With a superb ERC free tracker rate, a refunded valuation fee (up to £405) and free legals on remortgages, plus droplock and payment holiday facilities, this mortgage is likely to be at or near the top of the list for most borrowers who don’t initially want a fixed rate.
“Although a droplock option is an ideal feature for many borrowers in today’s market, it is rare to find it on a mainstream mortgage. Even lenders who offer all their new business rates to existing customers don’t include a droplock option in their mortgage offers. This leaves borrowers vulnerable to the risk that they may change their policy on what they offer existing customers.”
