Principality Mortgages has introduced the discount option five mortgage.
Aimed at first time home buyers as well as people who are looking to remortgage their properties, the mortgage has an interest rate based on a discount of 0.86 per cent, giving it a payable rate of 5.59 per cent for loans of up to 95 per cent of valuation until August 31, 2006.
The mortgage offers £250 cashback, with the only redemption penalty during the discounted period being the recovery of this cashback option. Principality has added compulsory buildings & contents insurance to the package. The mortgage is fully portable.
A survey carried out by MORI for the Council of Mortgage Lenders in January 2001 showed that 43 per cent of all borrowers have changed their mortgage in some way, either by moving to a new lender, renegotiating with an existing lender, or increasing the size of their mortgage.
According to Moneyfacts the most competitive five-year discount mortgage is from Nottingham Building Society. This has a discount of 1.6 per cent for loans of up to 75 per cent of valuation, giving it a payable rate of 5.14 per cent. The Nottingham mortgage has a redemption penalty of the reclamation of the discount during the discounted period. It also offers a refund of any valuation fees.