Scottish Widows Bank has introduced the option of a five-year stepped fixed rate to its 102% Graduate Mortgage to help graduates budget in the early years of their mortgage.
The qualifying period has also been extended to allow those who have graduated in the last seven years to apply.
The Graduate Mortgage allows individuals to borrow up to 100 per cent of the property's value plus a further 2 per cent to cover the associated costs of buying a new home, such as stamp duty and legal fees.
Gordon Bowden, business development director of Scottish Widows Bank, says: “Since the very successful launch, we have listened to feedback and improved the Graduate Mortgage by offering a fixed rate and extended the qualifying period.
“We understand the importance of planning expenditure in the early years of a mortgage and introducing a fixed rate provides peace of mind by fixing payments.”
The mortgage is now available with the five-year fixed stepped rate or as a base rate tracker mortgage with a 0.25% discount off the bank's base rate for the first 6 months. It then tracks at 1.25% above the bank's base rate, which currently stands at 4.0%.
The Graduate Mortgage allows applicants to borrow in excess of the standard guidelines, subject to a close relative of the applicant acting as a guarantor. The mortgage does not involve a mortgage indemnity guarantee (MIG) premium and the payment options available are capital repayment, interest-only repayment or a combination of both.