Legal & General is launching a mortgage fixed at 5.25 per cent for three years for borrowing up to 75 per cent loan to value. After three years the loan returns to L&G's standard variable rate, currently 6.35 per cent.
The mortgage has flexible features including overpayments without redemption charges, underpayments and payment holidays. Although redemption penalties apply if the loan is completely paid off during the fixed rate period.
L&G Bank managing director Mike Bury says: “Interest rates are at historically low levels but there is no guarantee they will stay this way over the medium to long term.”