Key workers and young professionals now have a stepping stone to help them afford their own home.
Bradford & Bingley have launched a five year stepped fixed rate mortgage, starting at 4.95% in the first year and then increasing by 0.5% per subsequent year during the fixed term. In the fifth year the rate would then be 6.95%, an average rate of 5.95% over the fixed term. The maximum loan to value is 90%. There are no extended tie-ins although there is a 5% charge during the fixed term. You may repay 5% of capital without penalty each year. Minimum income for applicants is £20,000. An arrangement fee of £300.00 is charged but the mortgage indemnity guarantee premium is free.
Our view
Be careful on how much you borrow! We believe interest rates may go up. There are also potential problems with council tax rises.
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