Platform Home Loans is looking to the adverse credit market with the introduction of the one-year fixed rate mortgage.
Platform specialises in the adverse credit market, which is made up of people who are unable to get a mortgage from a mainstream lender as they have had trouble paying their mortgage in the past, have levels of debt or who have had county court judgements (CCJs) made against them.
The mortgage has a fixed rate of 7.49 per cent for loans of up to 95 per cent of valuation. After this it will revert to between 3.5 to 4.5 per cent above the London Interbank Offered Rate.
It permits unlimited CCJs, up to six months mortgage arrears and recently discharged bankrupts. There is an early redemption penalty of 6 per cent of the advance in the first two years, 5 per cent in the third year and one per cent thereafter.
According to Moneyfacts the platform product is the most competitive one year fixed rate adverse credit mortgage for up to 95 per cent of valuation. The next most competitive is from GMAC Residential Funding. This has a fixed rate of 7.89 per cent until October 1, 2002. This product is also available for applicants with unlimited CCJs, six months mortgage arrears and recently discharged bankrupts. However in contrast to the Platform product it has higher redemption penalties of 7 per cent in the first year, 6 per cent in the second year, 5 per cent in the third year and 1 per cent thereafter.