Marsden Building Society is looking to the long term with the introduction of the 10-year fixed rate mortgage.
The mortgage has a fixed rate of 5.69 per cent until June 30, 2011 for loans of up to 80 per cent of valuation, and is open to all borrowers. It joins a very small market, as only five companies offer a ten-year mortgage. The others are Newcastle, Britannia, Kent Reliance and Birmingham Midshires.
The Marsden mortgage has redemption penalties of 5 per cent of the advance for the first six years of the loan, dropping by one per cent a year for the remainder of the fixed rate period to 1 per cent in year 10. It also has an arrangement fee of £295 and comes with free accident, sickness and unemployment cover for the first three months of the mortgage.
According to Moneyfacts on June 6, 2001, the most competitive 10-year fixed rate mortgage is from Birmingham Midshires. This has a fixed rate of 5.59 per cent until July 1, 2011 for loans of up to 95 per cent of valuation, and also has a £299 arrangement fee. It also has redemption penalties of 5 per cent of the advance in the first year, 4 per cent in the second year, 3 per cent in the third year and 2 per cent for the rest of the fixed rate period, which makes it more competitive than the Marsden product.