Hinckley & Rugby launches five-year fix with lower rate in final years

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Hinckley & Rugby Building Society has launched a five-year 95 per cent LTV mortgage with an interest rate which drops for the final two years.

The rate starts at 3.8 per cent for three years, then drops to 2.79 per cent for the final two.

Fees are £199 on application and £800 on completion. There is a free valuation on properties worth up to £1m.

The product is exclusive to the First Complete and Pink networks and has been designed to reflect the fall in LTV on a repayment mortgage.

Hinckley & Rugby head of intermediary sales Carolyn Thornley-Yates says: “It seemed a shame to us that people fixing for five years do not get to take advantage of capital reduction and the potential for house price appreciation like people on shorter term products do.

“This is particularly relevant at 95 per cent LTV, as the incremental difference between that and 90 per cent pricing is often much greater than, say, 85 and 90 per cent.

“Shorter fixes give the opportunity to fix again at a better rate. So, we created this new mortgage to have that interest reduction built-in whilst still giving homebuyers the certainty that they know what their monthly repayments will be for the full five years.”

First Complete and Pink mortgage manager Karen Hedges says: “This new, innovative product from Hinckley & Rugby will greatly appeal to borrowers, who not only want the peace of mind offered by a five-year fixed rate product, but are also looking for a guaranteed rate reduction in four to five years’ time.”