Standard Life Bank is continuing to swim into the fixed-rate mortgage market with the five-year fixed rate freestyle mortgage.
The product has a fixed rate of 5.6 per cent for loans of up to 90 per cent of the price of the property and is fixed for the first five years. Standard Life Bank has made it available to all borrowers.
Standard Life Bank will contribute up to £200 towards any legal fees incurred by the borrower and will also refund any basic valuation fees. Borrowers can take out a mortgage for up to a maximum of £400,000.
If the mortgage is redeemed during the fixed-rate period then borrowers will have to pay a fee on a sliding scale. If it is redeemed in the first year then the borrower will have to pay seven months interest, six months interest in years two and three, five months interest in year four and four months interest in year five.
The Standard Life Bank product is not the most competitive on the market according to Moneyfacts on October 8, 2001. The lowest rate for a five-year fixed-rate mortgage is provided by Cumberland Building Society, which has a fixed rate of 5.35 per cent until January 31, 2007 for loans of up to 95 per cent of valuation.
The Cumberland product offers free valuation fees if its valuation experts are used, along with free accident, sickness and unemployment insurance for the first six months of the loan. It has a maximum loan limit of £250,000 and redemption penalties of 5 per cent in the first year, descending by 0.5 per cent a year to 3 per cent in year five.