The strength of the remortgage market could mean greater interest in Market Harborough's flexible two-year discount mortgage, which is available for first-time buyers and remortgages up to 90 per cent of valuation.
Mortgage lending fell from £10.1 billion in December 2000 to £9.5 billion in January 2001, but the Council for Mortgage Lenders found that remortgaging went against the grain and rose from £2.9bn to £3.1bn.
The Market Harborough product has an interest rate of 5.24 per cent and if borrowers redeem during the first two years, they must pay six months' interest.
The mortgage is fairly flexible in that it allows overpayments, payment holidays, lump sum withdrawals and interest is calculated daily. But it lacks the ability to underpay, which means it is not as flexible as some mortgages.
According to Moneyfacts, Woolwich open plan is the only other flexible two-year discounted rate mortgage currently available. But it is for remortgages only up to 90 per cent of valuation. It has the same redemption penalty as the Market Harborough, but at 5.70 per cent, the interest rate is higher. However, the Woolwich mortgage is more flexible than the Market Harborough mortgage as it allows underpayments and also has an account facility.