Jeni Browne, Head of Residential & Buy to Let Lending, explains why you would choose a very competitive 10 year fixed rate offset mortgage
People often shy away from 10 year fixed rates as they feel that this is just too long to commit to a mortgage.
On the basis that so much can change during this time, the uncertainty of locking into a deal for so long and the possibility of paying large exit fees – Early Repayment Charges - should one need to repay the mortgage means that borrowers are put off these types of deals.
There are two main reasons why borrowers might may need to pay off a mortgage early and possibly suffer an early repayment charge - a home move or the being in a position to repay the mortgage early. But there is an alternative…
An attractively priced 10 year fixed rate with offset facility:
Rate: 3.19% fixed until 30/09/2026
Overall cost for comparison: 3.7% APR
Loan to value: Up to 65% LTV
Early repayment charges: £125 redemption fee plus 5% before 30/09/2018, 3% before 30/09/2021, 1% before 30/09/2026.
Overpayments: Up to 10% of outstanding balance per year.
Payment holidays: Yes, please ask for details
Linked savings account: Required
Lender arrangement fee: £999 (can be added to loan)
This mortgage is portable and so can be moved to a new home.
It is worth mentioning at this point that for all lenders, porting a mortgage means you can take the rate with you without paying an ERC, but the mortgage will be re-underwritten based on your circumstances at the time.
The offset facility means that you can pay an unlimited amount into your offset account thus ‘reducing’ the mortgage balance without paying ERCs.
In my opinion, this is an extremely well-priced rate, so do get in touch if it is of interest so that we can provide you with a Key Facts Illustration which demonstrates how the rate might work for you.
Call 0345 345 6788 and ask to speak to one of our expert Residential Mortgage Brokers today.
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