Portman Building Society has introduced the 5-year fixed rate mortgage.
Fixed until August 1, 2006, the mortgage has a fixed rate of 5.99 per cent for loans of up to 95 per cent of valuation. The mortgage is only available for first-time buyers.
The mortgage has a £300 arrangement fee and a redemption penalty of five per cent of the advance until the end of the fixed rate period. There are no other fees attached to the mortgage.
Fixed rate mortgages are proving less popular at the moment than discount and variable rate mortgages. Figures obtained from the Council of Mortgage Lenders show that in the first quarter of 2001 132,000 fixed rate and 279,000 variable rate mortgages were taken out. This contrasts with the first quarter of 2000, when 132,000 fixed rate and 244,000 variable rate mortgages were taken out.
According to Moneyfacts the most competitive five-year fixed rate mortgage is from Furness Building Society. This has a fixed rate of 5.59 per cent until June 19, 2006 for loans of up to 80 per cent of valuation. The mortgage also has a redemption penalty of 5 per cent of the advance during the fixed rate period and an arrangement fee of £295.