Leeds & Holbeck Building Society has re-entered the long-term fixed rate mortgage market with its range of portable mortgages over 15, 20 and 25 years. The new products are available from 28 November 2003. Many analysts and industry bodies claim this type of mortgage will only appeal if customers are not tied in for the full term. In response to the European Mortgage Finance Agency Project, analysts also predict lenders will only be able to offer such mortgages at a premium rate, some even claiming that they will be fixed at around 7.00%. Leeds & Holbeck's offering allows borrowers early redemption windows throughout the life of the loan and is available at 5.99%.
As before, Leeds & Holbeck believe that its new long term fixed rate mortgages address the criticisms that such products have traditionally been too inflexible and too expensive to be popular. The rate of 5.99% is set at a time when interest rates are still low but are expected to rise over the next 12 months. Furthermore, the mortgages offer "option windows" to redeem or transfer without penalty after five years and then every two years thereafter.
In addition to the rate, the key features of the mortgages are as follows:
* 5% capital repayments are allowed each year without penalty
* Interest is calculated daily
* The mortgages are fully portable, so if the customer moves home the mortgage can move with them
* There are 3-month duration option windows to redeem or transfer the mortgage in full without early redemption charge in year 5 and every two years thereafter.
* Tapered early redemption penalty outside of the option windows of 6 months interest at Leeds & Holbeck’s SVR in years 1-5, and 3 months interest at the SVR rate in years 6 onwards
* No higher lending fee
* No conditional insurance requirements
* Enhanced income multiples are available
Tony Burdin, Head of Marketing & PR, Leeds & Holbeck Building Society said: "Long term fixed rate mortgages offer customers stability when many commentators are predicting interest rates to rise. The availability of this type of mortgage is great news for the many people who want to be sure that they can afford their monthly repayments whatever happens to the economy or interest rates. We were pleased with the response to our earlier products and believe that there is a market for this type of mortgage in the UK.
Given that customers can choose to walk away from the deal after just five years, the loan adds up to a highly flexible package and addresses all the concerns some industry specialists have about this length of loan."
To find out more customers should contact their local Leeds & Holbeck branch, call 08450 50 50 62 or visit www.leeds-holbeck.co.uk.
