Leeds & Holbeck has revamped its base rate tracker mortgage to take advantage of the recent fall in interest rates.
The tracker mortgage will match the Bank of England base rate for the first three years of the loan until November 1, 2004. Until May 1, 2002 the mortgage will have a discount of 0.5 per cent and this gives it a payable rate of 4.5 per cent for loans of up to 95 per cent of valuation. The mortgage has an arrangement fee of £199 and has no redemption penalties.
The Bank of England monetary policy committee has cut interest rates steadily in an effort to invigorate the British economy and either avoid a recession or make any economic downturn short-lived.
In January 2001 the rate was set at 6 per cent. The latest cut, made on August 2, 2001, saw rates fall to 5 per cent, their lowest level since mid-1999.
According to Moneyfacts on August 13, 2001, the Leeds & Holbeck building societys mortgage is the lowest base rate tracker mortgage on the market, and is unique as it is the only one available with a base rate discount. The next most competitive is from Melton Mowbray Building Society. This mortgage tracks the base rate, although only for the first two years, before going up to a rate of 0.99 per cent above the base rate for loans of up to 90 per cent of valuation. The Melton Mowbray mortgage has no redemption penalties and comes with free unemployment cover for a year.