Coventry Building Society has unveiled a three year fixed rate flexible mortgage that has no early redemption penalties.
The three-year Flexx fixed mortgage is available for loans up to 95 per cent of valuation and maximum loan amount of £500,000. It is fixed at 6.25 per cent until October 31, 2004.
Borrowers can make overpayments, take a payment holiday each year for up to three months and interest is calculated daily, but there are no facilities for lump sum withdrawals and underpayments which compromises its flexibility.
According to Moneyfacts on July 20, 2001, Nationwide Building Society has a similar flexible three-year fixed rate mortgage at 6.09 per cent. Like the Coventry mortgage, it has no early redemption penalty and in addition to the lower fixed rate, it is more flexible. Overpayments can be made by borrowers to fund underpayments, payment holidays up to twelve months, lump sum withdrawals can be taken and interest is calculated daily.
However, the Nationwide mortgage is limited to a maximum advance of £150,000 for loans at 95 per cent of valuation, which could make it less suitable for first time buyers in areas where property prices are shooting through the roof. The Nationwide house prices index shows that the average property price in London was £160,635 in the second quarter of 2001.