Legal & General is targeting the flexible mortgage market with the introduction of the three year fixed rate flexible mortgage.
The mortgage has a fixed rate of 5.25 per cent for the first three years of the mortgage, for loans of up to 75 per cent of valuation. At the end of the fixed rate period the mortgage will revert to Legal & General's standard variable rate, which on April 23, 2001 was 6.5 per cent. It is aimed at first time buyers and people who are looking to remortgage their property.
The three-year fixed rate mortgage includes the ability to overpay, underpay, take payment holidays and lump sum withdrawals. Interest is calculated daily. The mortgage has redemption penalties of three per cent of the advance in year one, two per cent in year two and one per cent in year three.
According to Moneyfacts the Legal & General product is one of the most competitive three year fixed rate flexible mortgages on the market on April 23, 2001. The 5.25 per cent fixed rate mortgage from Pink Home Loans is the only other mortgage that can compete. The Pink Home Loans mortgage has a fixed rate of 5.25 per cent for the first three years for loans of up to 75 per cent of valuation. It also offers underpayments, overpayments, payment holidays, lump sum withdrawal and daily interest, while redemption penalties are three per cent of the advance during the fixed rate period.