Scarborough Building Society has brought in the stepped flexible lifetime discount mortgage.
The mortgage has an initial discount of 5.54 per cent for the first six months of the mortgage, giving a payable rate of 4.45 per cent for loans of up to 95 per cent of valuation. After this period for the rest of its term the mortgage will revert to a 0.99 per cent discount from the companys standard variable rate, which on May 18, 2001 was 6.99 per cent.
Scarborough will refund the valuation fee and the mortgage offers the ability to make underpayments, overpayments, lump sum withdrawals and payment holidays. However interest is calculated monthly.
Looking at the competition that the mortgage faces, it is not the most competitive on the market. According to Moneyfacts on May 18, 2001 this title goes to the stepped rate flexible tracker mortgage from the Britannia Building Society. This has a discount of 2 per cent for the first six months giving the mortgage a payable rate of 4.35 per cent. After this the mortgage will have a discount of 0.15 per cent for the next five years, followed by a 0.3 per cent discount for the term of the mortgage. The Britannia mortgage offers underpayments, overpayments, lump sum withdrawal, payment holidays and daily interest.