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Scottish Building Society flexes and discounts

Scottish Building Society is getting flexible with its new discounted mortgage.

The Scottish flexible mortgage has a discount of 2 per cent for the first six months of mortgage and is available for loans of up to 90 per cent of the value of the property, up to a maximum of £150,000. This gives it a payable rate of 5.5 per cent. The mortgage is only available for the purchase of properties in Scotland.

Borrowers looking to remortgage can benefit from free valuation and basic legal fees if a solicitor reccomended by Scottish Building Society is used. If the mortgage is redeemed in the first five years then the borrower will have to two months’ interest in the first three years or one months interest in years four and five.

The mortgage offers the facilities to make overpayments, underpayments and to take payment holidays. However unlike other flexible mortgages interest is calculated monthly and not daily. There is also no facility to take lump sum withdrawal.

There are just two building societies that confine their lending to Scotland. These are Scottish Building Society and Dunfermline Building Society. However, Dunfermline does not offer any discounted flexible mortgages, making the Scottish Building Society mortgage unique.

The mortgage is also the most competitive six-month discounted flexible mortgage in the UK. The next most competitive mortgage is from Standard Life Bank which has a discount of 1.76 per cent, giving a payable rate of 3.74 per cent for loans of up to 90 per cent of valuation. The Standard Life Bank mortgage also has a redemption penalty of three months’ interest in the first year.


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