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Long-term fix from the Marsden

Marsden Building Society has introduced a 10-year fixed rate mortgage that is available for loans of up to 80 per cent of valuation.

The mortgage, called plan 41, is fixed at 5.99 per cent until June 30, 2011 and borrowers who redeem during this period must pay an early redemption penalty. This is 5 per cent of the outstanding loan in the first six years, 4 per cent in year seven, 3 per cent in year eight, 2 per cent in year nine and 1 per cent in year 10.

A £295 arrangement fee is payable and legal fees for remortgages are paid by the Marsden if its in-house solicitors are used.

According to Moneyfacts on July 6, 2001, this is the only mortgage of its type and this is because many borrowers are reluctant to fix their mortgage for such a long period.

Borrowers who do want a long-term fixed rate could go for Britannia Building Society&#39s 10-year fixed rate at 5.89 per cent up to 75 per cent of valuation or 5.99 per cent for loans of up to 95 per cent of valuation if they need to borrow more.

Like the Marsden Building Society, Britannia Building Society asks borrowers to pay an arrangement fee of £295. However, it has an early redemption charge of 360 days&#39 interest in the first five years and 180 days&#39 interest in the final five years.

A borrower who redeems a £100,000 mortgage over 25 years would pay £5,000 in the first six years with the Marsden Building Society, £4,000 in year seven, £3,000 in year eight, £2,000 in year nine and £1,000 in year 10. If they redeemed the Britannia Building Society over the same terms, they would pay £6,795 in the first five years and £3,398 if they redeemed in the final five years.

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