Clydesdale and Yorkshire Banks have launched a series of low start mortgages that combine the lower payments of interest only with the long term security of repayment mortgages.
The low start mortgages begin on an interest only basis at a fixed rate for the first three years, automatically converting to capital and interest repayment basis for the remaining term of the loan.
‘We are focused on meeting the differing needs of our range of customers and we recognise that there are stages in life when it would be useful to be able to make lower mortgage payments,’ said Andrew Pearce, retail director for Clydesdale and Yorkshire Banks.
‘Low Start has been designed to meet this specific need within the market for a mortgage which initially offers lower payments, but also provides the peace of mind that the full loan will be paid off over the term of the mortgage,’ he explained.
The maximum loan to value for the low start mortgage is 80% and the standard product features, eligibility criteria and the approach to underwriting are in line with Clydesdale and Yorkshire Banks' full mortgage product range.
Customer affordability at the outset is assessed based upon the higher capital and interest payment and at the end of the fixed rate period the mortgage reverts to Standard Variable Rate, currently at 4.95%.
When the fixed rate period ends the customer will be invited to review their mortgage and could switch to another deal in line with the standard process at the end of a fixed term. Customers cannot take another low start mortgage and the maximum loan amount is £999,999.
At the other end of the property range, Investec, the specialist bank and asset manager, has cuts rates on its professional mortgages range by up to 0.40%.
The lender, which specialises in high income borrowers and larger loans, as well as mortgages for qualified professionals, has introduced new five year fixed rates on its residential range and cut the completion fee on its buy to let products.
Investec professional mortgages launched in February this year and has already gained traction in the market through its specialist products and commitment to provide intermediaries with direct access to key decision makers.
This launch sees rates on its residential range cut by up to 0.30% and prices on its buy to let products reduced by up to 0.40%. In addition, the completion fee on Investec's buy to let mortgages has been cut by 1% to 1.5%. And, in response to market demand, five year fixed rates have been launched up to 75% LTV on the residential range.
‘We have already seen that mortgage intermediaries want to speak to key decision makers when it comes to their high income clients, and we know there is demand for a lender that is able to consider all elements of a borrower's variable income, so we are excited about making our mortgages even more attractive by cutting rates right across the range,’ said Alex Hammond of Investec Specialist Bank.
Meanwhile, Chelsea Building Society has announced a new best buy rate of 1.99% for a 75% LTV two year fixed rate mortgage. The new product is among reductions of up to 0.25% which the lender is making to rates across its range of 75% LTV mortgages.
The 1.99% mortgage has an offset equivalent of 2.19% and each product has a £1,545 fee.
Mortgages in the Chelsea's 75% LTV range include £745, £345 and £245 completion fee products and mortgages with incentives, including cashback of up to £500 or free legal and valuation assistance, for borrowers seeking to minimise their upfront costs.
‘We've reduced our rates as we aim to be competitive across our mortgage range at all LTVs. As well as the 1.99% two year fixed rate mortgage at 75% LTV, we also have cut our five year fixed rate mortgage from 2.84% to 2.69%,’ said Chelsea Building Society product manager Chris Smith.
‘Our 75% LTV mortgages are available in branch, online or by telephone so borrowers can choose the channel that suits them best to apply. All Chelsea Building Society mortgage products have an offset equivalent, priced 0.20% above the standard mortgage product,’ he added.
