Scottish Building Society is introducing the Scottish flexible mortgage.
The mortgage offers the ability to overpay, underpay and take payment holidays and interest is calculated monthly. However, it does not have the option to make lump sum withdrawals like many other flexible mortgages.
For the first six months of the mortgage it will have a 2 per cent discount on the interest rate, giving it a rate of 5 per cent. After this the interest rate will revert to Scottish Building Society's standard variable rate, currently set at 7 per cent.
A rate of 5 per cent places this mortgage in the mid range of interest rates for flexible mortgages. Currently the lowest rate flexible mortgage on the market is the discounted flexible mortgage from Yorkshire Building Society. This has a payable rate of 3.74 per cent for four months and offers overpayments, underpayments, payment holidays and interest calculated daily. Like the Scottish flexible mortgage it does not offer lump sum withdrawals.
However, the Scottish flexible mortgage is only on offer for properties in Scotland, whereas the Yorkshire building society product can be used to buy a property anywhere in the UK.
