Skipton launches “Stepped” fixed rate loans
by Gill Montia
Skipton Building Society has launched two five-year fixed-rate mortgages.
The products aim to accommodate anticipated changes in financial circumstances as interest rates on the “Stepping up” and “Stepping Down” loans change annually.
In the case of Stepping Up, the starting out rate is a low 5.39%, rising to 6.99% by 2013 for borrowers signing up this year. The average annual rate works out at 6.19%.
The lender says the product is aimed at those for whom standard fixed-rates are too expensive, where the borrower is confident that their income will increase over the coming years.
Alternatively, customers who opt for Stepping Down will pay interest at 6.99%, reducing to 5.39% after four years.
Again, the average annual rate is equal to Skipton’s existing flat rate 5-year fixed mortgage, at 6.19%.
The Stepping Down loan could appeal to homeowners who know they want to reduce their outgoings during the period of the fix.
Both products have a maximum loan-to-value ratio of 75% and a completion fee of £895.
They revert to Skipton’s Standard Variable Rate at the end of their terms (currently 6.45%).
For remortgagers, free legal and valuation fees are on offer.
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