Verso has introduced the 5.48 per cent self-certification fixed-rate mortgage.
The mortgage is aimed at self-employed people who have difficulties proving their income. First time homebuyers or existing homeowners may apply.
For the first year the interest rate is fixed at 5.48 per cent for loans of up to 85 per cent of valuation, with a maximum loan of £250,000. For the second year of the mortgage the rate has a discount of 1.25 per cent from Versos standard variable rate.
The mortgage also has an extended redemption penalty of five per cent of the advance for the first three years of the loan, and a completion fee of £325.
According to Moneyfacts on April 18, 2001, the Verso product has the lowest one-year self-certification fixed rate on the market. The next is the 6.8 per cent mortgage from GMAC Residential Funding. This has a fixed rate of 6.8 per cent for the first year of the mortgage for loans of up to 65 per cent of valuation, with a maximum loan of £500,000. After this it reverts to 2.25 per cent above the London Inter Bank Offered Rate. But the GMAC mortgage has tiered redemption penalties of seven per cent of the advance in the first year, six per cent in the second year and five per cent in the third year, and a completion fee of £395, which do not seem as competitive.