Standard Life Bank is entering the fixed rate mortgage market in a bid to broaden its appeal and capture more market share.
The new mortgage, called the freestyle-fixed, is fixed for three or five years at 7.25 per cent. The launch follows the roaring success of the Standard Life Bank flexible freestyle mortgage.
The mortgage bank is also launching a mortgage which combines fixed and flexible elements. The flexible features include overpayments, payment holidays and equity drawdowns.
Managing director Neil Ross says some customers want the certainty provided by fixing part of their mortgage, while still being able to benefit from flexible features.
Both mortgages have daily interest calculations, no tie in after the fixed rate period ends and maximum loan to value of 90 per cent. There is a contribution of £200 towards legal fees. The application process is phone-based. Each fixed rate mortgage will have a product booking fee of £195.
Standard Life Bank has completed £4.1bn worth of mortgages since launch in January last year with the Freestyle flexible mortgage, representing a huge slice of the mortgage pie. It expects to lend around £3bn this year.
Ross says: “Mortgage customers are looking for options which best suit their lifestyle needs. We are therefore launching these two new products to cater for the needs of a greater number of customers.
“We recognise that not all customers want the same features from their mortgage and by offering three different types of product which can be used in any number of combinations, we can ensure customers receive the level of flexibility and security preferred.”