Leeds & Holbeck Building Society has brought in the no-ties tracker mortgage.
The mortgage will track the Bank of England base rate until September 1, 2004, and has a discount of 0.5 per cent from the base rate until March 1, 2002. This gives it a payable rate of 4.75 per cent. It is available for loans of up to 95 per cent. After the tracker period the rate will revert to Leeds & Holbeck's standard variable rate.
There is an arrangement fee of £199 and Leeds & Holbeck will pay any legal fees on remortgages. However there is no redemption penalty at all, although the mortgage does come with compulsory Leeds & Holbeck buildings and contents insurance.
Over the past seven months, interest rates have dropped from six per cent to 5.25 per cent in an effort to avert a recession in Britain. Further cuts are possible following data released by the Office of National Statistics on July 27, 2001 that showed that UK GDP rose by just 2.1 per cent over the second quarter of 2001, the smallest rise for two years. Further interest rate reductions by the Bank of England might be too little too late in order to avoid a lasting recession. Rate cuts in the US were swingeing and seem to suggest that it has avoided serious problems.
According to Moneyfacts the Leeds & Holbeck mortgage is the most competitive three-year tracker mortgage. The next most competitive is from Abbey National. This has a discount of 0.7 per cent for loans of up to 75 per cent of valuation until March 1, 2002. Like the Leeds & Holbeck product it then reverts to the Bank of England base rate for the next two years, before moving to Abbey National's standard variable rate. Like the Leeds & Holbeck mortgage it does not have a redemption penalty, but it does not come with compulsory buildings and contents insurance.