The discount is set at 1.50 per cent until September 2006, 0.75 per cent until September 2007 and 0.25 per cent until September 2008. There is no early repayment charge after three years, subject to one month’s notice, and it is available across a range of adverse products from extra-light to unlimited.
The discount is available up to 85 per cent LTV on purchase, remortgage, verified and self-certification products as well as right-to-buy and buy-to-let deals, and loans are available up to £1 million.
Cate Hillis, head of product development at Preferred, said: “We’re launching this discount following feedback from our intermediaries. Our core range offers more choice for the intermediary and the customer, and the stepped discount reduces the rate shock factor for the borrower.”
Scott Richford, consultant at Mortgage Talk, said the deal would attract clients across the adverse spectrum. He said: “Deep discount in the first year will attract customers but they should be aware that the discount alters over the three years.
“The product has no extended tie-ins so when it reverts to the standard variable rate, which varies according to their level of adverse credit, the customer can review and potentially switch providers for a better deal.
“Many lenders have products for one or two years but have extended tie-ins on a higher SVR which the client would have to put up with for one to two years.”
