The rate is fixed until March 31, 2014 and the deal is available for loans up to £250,000. A completion fee of £800 is charged plus a £195 reservation fee, bringing total fees up to £995.
Capital repayments of up to £500 a month are allowed without penalty in the fixed-rate period but any overpayments above this will incur an early redemption charge. This is charged at 3 per cent of the amount repaid during the fixed-rate period.
This mortgage lacks the incentives that are available on Legal & General Mortgage Club’s similar Newcastle Building Society two-year fix at 6.25 per cent to 95 per cent of valuation For the higher rate, borrowers pay no arrangement or reservation fee; receive a free valuation if their property is valued up to £500,000 and either a £300 cashback or free legal fees.
Defaqto insight analyst for banking David Black says: “There’s been a gradual increase in the number of mortgages available in the 95 per cent LTV range but there is a significant interest rate premium for high LTV mortgages – typically 1.25 to 2 per cent.
“Prior to the credit crunch there was comparatively little difference in the interest rate charged whether you wanted a 60 or 90 per cent LTV mortgage.
“If you disregard mortgages restricted to product transfers, family guarantees, shared ownership and the like, Legal & General’s 5.95 per cent is fairly competitive at 95 per cent LTV. Shepshed’s five-year year fixed at 5.49 per cent with a £499 application fee but £999 through intermediaries looks to be the pick of the current crop of 95 per cent LTV mortgages.”