Product of the week: High LTV 5 year fixed rate with no early repayment charges

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Five year fixed rates have become more popular than ever over recent months, as market and economic uncertainty has seen many borrowers favouring the security of a longer-term fixed rate over the lower price of its two-year counterpart. However, as competition between lenders and a seemingly unstoppable appetite to lend continues to spread, five year fixed rates have also now been dropping to previously unseen prices and become very popular as a result.

The benefits of a five year fixed rate are fairly obvious: it provides borrowers with the security of knowing that their monthly payments will not rise for the product term and avoids the costs of remortgaging for another 5 years. The drawbacks are that rates can be higher to compensate for the security and for anyone with anticipated changes in circumstances (such as further borrowing or moving home) a long term fix can be quite inflexible or have hefty early repayment charges.

Lenders are continuing to reduce their fixed rates as a result of borrowers deciding to opt for these products, yet an influx of low prices has made the stakes higher as far as lender competition is concerned.

This is where our top product for this week comes in. A lender we have an excellent relationship with is now offering one of the most competitive five year fixed rates on the market, which is available to everyone – including first time buyers.

5 year fixed rate at 90% Loan to Value (LTV) with no early repayment charges

The product in question is a five year fixed rate available up to 90% LTV at a rate of 3.15%. In terms of pricing this is competitive even before any other perks come in. The main draw of this product is the fact that is has no early repayment charges at all.

With no penalties, borrowers can enjoy the security of a long fixed rate with complete flexibility. This means that should property prices increase a borrower can remortgage onto a better loan to value product. Alternatively, in the unlikely event of a base rate fall, borrowers can remortgage and take advantage of more competitive rates.

This product comes with no booking fee, free valuation and no early repayment charges. It is very rare for lenders to offer no early repayment charges on fixed rates at all and this is almost unheard of for five year fixed products.

This means that for borrowers seeking greater security but still wishing to exercise some flexibility, they can make the most of this beneficial five year fixed rate now, yet still remortgage earlier than the given term depending on market movement or personal circumstances –  at no extra cost.

If that wasn’t all, first time buyers can also take of advantage of having no additional costs with the product, which has been known to catch out some borrowers when applying for a very cheap rate. This also makes budgeting around your repayments easier with more freedom to plan for the future – thus potentially leaving you in a better position once the mortgage term is up.

If this product is something you are interested in, or you have any questions on similar products and the market in general, please do not hesitate to get in touch. One of our specialist brokers will be on hand anytime to answer your questions and provide expert advice for your financial needs.



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