Sun Bank, the mortgage arm of Sun Life Financial of Canada, has brought in the five-year fixed rate mortgage.
The mortgage has a fixed rate of 5.74 per cent for loans up to 75 per cent of valuation until September 1, 2006 and is aimed at both first time buyers and people looking to remortgage. After the fixed rate period the mortgage will revert to Sun Banks standard variable rate, which on May 29, 2001 was 6.74 per cent.
The Sun Bank mortgage comes with redemption penalties of 5 per cent of the advance during the fixed rate period and has an arrangement fee of £395.
According to Moneyfacts on May 29, 2001, there is a more competitive five-year fixed rate mortgage. This is the five-year fixed rate mortgage from the Leeds & Holbeck Building Society, which has a fixed rate of 5.49 per cent for loans of up to 90 per cent of valuation until September 1, 2006. The mortgage has a less competitive early redemption penalty of six per cent of the advance in the first three years, reducing to three per cent in the next two years. It also has an arrangement fee of £395, but unlike the Sun Bank mortgage deal, it comes with compulsory buildings and contents insurance.
Based on a £100,000 mortgage, according to London & Country Mortgages the monthly payments for the Sun Bank mortgage would come to £628.50. Payments for the Sun Bank mortgage would cost £620.64 a month.