Principality Mortgages has brought in the three-year fixed rate mortgage.
Aimed at first time buyers and people looking to remortgage their properties, the mortgage has a fixed rate of 5.6 per cent for the first three years of the loan up to 75 per cent of valuation. Interest on the mortgage is calculated daily.
It also comes with redemption penalties of 2.5 per cent of the advance during the fixed rate period. And unless the Principalitys buildings and contents insurance is taken out, an extra 0.19 per cent is added to the interest rate. The mortgage is also portable.
According to Moneyfacts on May 29, 2001 the Principality product is not the most competitive on the market. This is the three-year fix from Darlington Building Society, which has a fixed rate of 5.24 per cent until June 30, 2004 for loans of up to 90 per cent of valuation. The Darlington mortgage has redemption penalties of six months interest during the fixed rate period, but building and contents insurance is compulsory. Whereas the Principality mortgage is portable, the Darlington mortgage is not.
Based on a £100,000 mortgage, according to London & Country Mortgages, monthly payments for the Principality product would cost £620.07. In contrast payments for the Darlington product would cost £605.57.