Platform Home Loans has introduced the one-year fixed-rate light adverse credit mortgage.
Set at 6.99 per cent for loans of up to 85 per cent of valuation, the mortgage is fixed until January 1, 2003.
Platform is aiming the mortgage at clients who have missed up to two mortgage payments in the past year, or who have had any number of county court judgements (CCJs) against them for a maximum total of £2,000. Platform will ignore any CCJs more than three years old or for less than £100, and any mortgage arrears more than a year old.
If the mortgage is redeemed in the first three years, borrowers will face a fee of 5 per cent of the advance in the first year, 4 per cent in the second year and 2 per cent in the third year.
This is not the most competitive one-year fixed-rate adverse credit mortgage on the market. According to Moneyfacts the lowest rate is from the First National Mortgage Company, with a fixed rate of 5.49 per cent for loans of up to 60 per cent of the property valuation.
The First National Mortgage Company product has a lower interest rate and allows any number of CCJs with no maximum total. However, it requires a larger deposit than the Platform mortgage and has redemption penalties of 4 per cent in the first year, 3 per cent in the second year, 2 per cent in the third year and 1 per cent in the fourth year.