GMAC-RFC is offering a new mortgage which it says addresses two of the market's main issues – long-term fixed rates and the gap between incomes and property prices.
It believes it has worked out how to make long-term fixes more attractive and how to bridge the gap between incomes and house prices without using self-certification.
On its new 25-year customised mortgage, GMAC-RFC charges no more than 5.95 per cent for 25 years on the fixed-rate element.
This is combined with a penalty-free base plus a 0.75 per cent tracker in five different customised options.
The company claims the security of the long term fix means clients can borrow up to five times their fully declared income. It says it has reduced the redemption charge for seven years of the 25 years on the fixed-rate portion only and clients can take the mortgage with them when they move house, borrowing more if needed at the variable tracker rate.
Head of marketing services Jeff Knight says: “Advisers and borrowers understand that paying no more than 5.95 per cent for the rest of your mortgage life is outstanding value. The problem with these products in the past has always been the redemption penalties, combined with concern about losing out to short-term rate reductions.”