Ray Boulger, senior technical manager at Charcol, says that the rate alone on this three year discount puts other discounts and trackers in the shade. In addition the remortgage only product has low set up costs as there are free legals and the valuation fee is refunded on completion. There are no early repayment charges, even within the three year discount period.
He says: “Borrowers coming to the end of a fixed rate may be reluctant to lock into a new fix now as we appear to be at or near the top of the interest rate cycle, which is why the cost of fixed rate mortgages has already started falling.
“Because it has no early repayment charges this exceptional deal gives borrowers the opportunity of switching into a low discount rate now, whilst retaining the option to move to a fixed rate if and when they decide fixed rates offer better value.
“Most remortgagors will not need to borrow more than the 85% LTV maximum available on this deal but it will not be suitable for everyone as the minimum loan size is £150,000.”