Primarily aimed at new-build customers, the mortgage has a 2.5 per cent product fee, which builders may offer to cover as an incentive.
Northern Rock marketing director Allison Thompson said: “The two-year Flexible Fixed Rate with 2.5 per cent product fee will now have no ERC. Furthermore, the rate on this product remains unchanged, meaning that we are offering a two-year fixed rate with no ERC from only 3.99 per cent, the lowest two-year fixed rate in the market with no tie in.
“The 2.5 per cent fee allows customers to access a market leading rate on a product that also offers flexibility. This product is not only excellent for new-build customers in those cases where the builder offers to cover the cost of the product fee as an incentive, it may also appeal to customers who want to keep their monthly payments as low as possible.
“With Northern Rock’s two-year Flexible Fixed products, customers have the option to pay a fee of 2.5 per cent, £995, £795 or no fee at all. A higher fee allows customers to access a lower rate and, most importantly, they are free to choose whichever product is best suited to their individual circumstances.
“The two-year Flexible Fixed Rate with 2.5 per cent product fee now gives customers the peace of mind that if their circumstances change they will be able to change or close their mortgage without incurring an Early Repayment Charge.
“Our product range continues to offer a number of other valuable benefits as standard including:
• a Fee Saver Option - available on all products- whereby customers can choose to pay a slightly higher rate of interest in exchange for not paying a Product Fee
• £500 Help With Costs option - available on all products (except Lifetime Mortgages and mortgages with a £995 Product Fee and their Fee Saver Option equivalents)
• no Higher Lending Charge on any Northern Rock mortgage product
• no extended Early Repayment Charges
• full flexibility as standard, with daily interest calculation, unlimited penalty free overpayments, underpayments, borrow back overpayments at the product rate and the option to take payment holidays, even if customers have not previously overpaid.
“In addition, all our mortgage products are available to our existing borrowers. Subject to any conditions attached to their existing mortgage, Northern Rock customers can switch to any one of our latest deals. We believe that all these features continue to offer a very attractive overall product proposition and are in keeping with our commitment to openness, transparency, and fair treatment of customers.”
