Newbury Building Society has improved its Newbury 5 mortgage, which has a five year discount and no early redemption penalties.
Loans of up to 75 per cent of valuation have the biggest discount 0.5 per cent, giving a payable rate of 5.74 per cent. Loans of between 76 and 90 per cent of valuation have a 0.35 per cent discount, giving a payable rate 5.89 per cent. Loans of between 91 per cent and 95 per cent of valuation offer a 0.20 per cent discount, giving a payable rate of 6.04 per cent.
According to Moneyfacts on May 24, 2001, the Newbury 5 mortgage is the most competitive mortgage of its type, but only for smaller loans at 5.74 per cent. The closest competitor is Stroud & Swindon Building Society's five year discounted rate mortgage that has a flexible option. It has a payable rate of 5.99 per cent, regardless of the size of the loan.
Like the Newbury mortgage, it has no redemption penalty. Although it has a higher rate than the Newbury mortgage for borrowers with loans up to 90 per cent, borrowers who need the flexibility may find it more attractive. Borrowers with larger loans, particularly first-time buyers with small deposits, can get a lower interest rate with Stroud & Swindon and also have the benefit of flexible features such as overpayments, underpayments, payment holidays and lump sum withdrawals.