Ipswich Building Society is targeting people who are taking their first steps onto the property ladder with its three-year fixed-rate mortgage.
This product is aimed solely at first-time buyers and has a fixed rate of 5.29 per cent until March 31, 2005, for loans of up to 95 per cent of valuation. It is only available for properties in England and Wales.
The first-time buyer market increased slightly in the third quarter of 2001, according to the latest figures from the Council of Mortgage Lenders. Its figures show that 44 per cent of all mortgages in 2001 were bought by first-time buyers, up from 42 per cent in the second quarter.
If the borrower uses valuers recommended by Ipswich Building Society, then basic valuation fees are refunded. The mortgage is fully portable and clients can claim up to £500 cashback. If it is redeemed in the fixed-rate period there are redemption penalties of 3 per cent of the advance in the first year, 2 per cent in the second year and 1 per cent in the third year.
This is not the most competitive three-year fixed-rate mortgage on the market, according to Moneyfacts on November 29, 2001. The lowest rate is available from Darlington Building Society with a mortgage set at 4.49 per cent until April 30, 2005, for loans of up to 90 per cent of valuation.
Darlington also refunds basic valuation fees if its valuation experts are used. The mortgage has a redemption penalty of three months interest during the fixed-rate period and an arrangement fee of £199. According to Kingdom Asset Management if the Darlington mortgage was redeemed in the first year it would cost £1,120 in fees, while the Ipswich Building Society mortgage would cost £3,000, based on a £100,000 mortgage.