Adverse credit specialist Platform Home Loans has introduced the one-year fixed rate mortgage.
The mortgage is aimed at people who have had high levels of debts, county court judgements (CCJs) made against them, mortgage arrears or even been bankrupt in the past and the self-employed who are unable to prove their earnings.
It has a fixed interest rate of 6.74 per cent for loans up to a maximum of 65 per cent of valuation until December 1, 2002. After this period the interest rate will revert to between 3.5 and 4.5 per cent per cent above the London Interbank Offered Rate.
Applicants can have an unlimited number of CCJs and up to six months mortgage arrears. The redemption penalty is six per cent of the advance in the first two years, five per cent in year three and one per cent after this.
According to Moneyfacts the most competitive one-year fixed rate mortgage is from First National Mortgage Company, which has an interest rate of 5.99 per cent until August 31, 2002. Compared to the Platform mortgage, this has a lower maximum loan to value of 60 per cent of valuation and it will allow unlimited CCJs but also unlimited mortgage arrears. It has a lower redemption penalty of four per cent of the advance in year one, three per cent in year two, two per cent in year three and one per cent thereafter. But both mortgages have an arrangement fee of £395.
The biggest advantage that the Platform mortgage has is the fixed rate period, which will run to two months longer. Borrowers will benefit from a longer period paying the fixed rate.