Pink Home Loans is offering a 100 per cent loan to value discounted rate mortgage.
Funded by Amber Home Loans, the mortgage has a discount of 1.5 per cent for the first year of the loan, giving it a payable rate of 4.89 per cent for loans of up to 100 per cent of valuation.
All first-time buyers must provide three months worth of bank statements and existing mortgage borrowers must be able to supply a mortgage statement covering the past year. Any self-employed applicants must be able to supply two years worth of accounts.
The mortgage has an arrangement fee of £195 and if is it redeemed in the first three years there will be a fee of 5 per cent of the advance in the first year, 4 per cent in the second year and 3 per cent in the third year. It is also portable during the first three years.
This product raises the total number of one-year discounted 100 per cent loan to value mortgages with extended redemption penalties to seven. Norwich Unions 3.25 per cent discount mortgage offers the lowest interest rate, which is currently a discount of 3.25 per cent on Norwich Unions standard variable rate, giving a payable rate of 3.6 per cent until November 1, 2002.
The Norwich Union product is more competitive than the Pink Home Loans mortgage in many ways as it has no arrangement fee and comes with free accident, sickness and unemployment insurance for the first six months of the loan. It also has a redemption penalty of 3 per cent of the advance in the first two years and 2 per cent in the third year, lower than the Pink mortgages redemption penalties.