The Co-operative Bank has launched a 10-year fixed rate mortgage, with an interest rate of 5.69% until May 31 2014.
The fixed rate mortgage is available for house purchase and for remortgaging, with a maximum advance of 95% of the property value. For remortgages, the bank will pay legal and valuation fees. Interest on the mortgage is calculated on a daily basis, rather than by the traditional annual method.
The mortgage has been designed to provide repayment flexibility, allowing borrowers to create a flexible fund, which can then be used to pay off up to 5% of the mortgage balance each year without penalty, therefore reducing the total amount of interest paid. Alternatively, borrowers can withdraw all or some of the fund at anytime, or use it to take a repayment holiday.
The mortgage has a number of positive environmental features. House purchasers get a free home energy rating report with their property valuation. This assesses the energy efficiency of the property, and identifies ways in which it can be improved, therefore giving bothfinancial and environmental benefits.
For the duration of the mortgage, the bank will also make an annual donation to Climate Care to help tackle global warming. This scheme was developed after extensive consultation with the environmental community, including WWF and Forum for the Future.
Paul Rumbold, head of mortgages at The Co-operative Bank, says: “With interest rates following a rising trend, it is a good time for many borrowers to consider a fixed rate mortgage. With the 10-year fixed rate mortgage, borrowers have the peace of mind of knowing that, however much interest rates may rise between now and 2014, the amount they are paying will not change.”