Newcastle Building Society has revised its range of two and five-year fixes for individuals seeking to remortgage their property at 80 per cent loan-to-value and below.
A two-year fix to 60 per cent LTV is priced at 1.87 per cent and 1.96 per cent for borrowers with a 20 per cent deposit.
An early repayment charge of 2 per cent is applicable for the first year into the fix, and 1 per cent for the second until 31 January 2019.
Customers looking to fix their rate for a longer period can choose between two five-year products. A rate of 2.05 per cent is available at a maximum LTV of 60 per cent, or 2.40 per cent to 80 per cent LTV.
An early repayment charge of 5 per cent to 1 per cent applies on a decreasing annual basis until 31 January 2022.
All of these products come with no reservation or completion fees, as well as free legal and standard valuation fees up to £500,000. The fixes are also followed by a standard variable rate for the remainder of the term, currently at 5.99 per cent.
In early September, the lender refreshed its range of two-year fixes available exclusively for self-employed borrowers who have been trading for two years and under. The products offer free valuations (on properties up to and including £500,000).
Provider view
Steve Carruthers, head of mortgage distribution at Newcastle Intermediaries, said: “We have reassessed our fixed-rate mortgages, and our range of two and five-year deals where the LTV is below 80 per cent are ideal for those customers that need the reassurance of regular payments.
“Additionally, the fees-free element allows borrowers to free up extra cash, at a time when they may need it most.”
Adviser view
Commenting on the two-year fix at 80 per cent LTV, Alex Reynolds, IFA at London-based Advies Private Clients, said: “It sounds like a reasonable rate. It is not the best rate out there, but Newcastle has a few things that are different from other providers in terms of lending criteria. This product is most likely to suit individuals with a high value mortgage. The best rate at the moment for remortgagers at 80 per cent LTV is around the 1.5 per cent figure, but there are fees attached. So unless you have a tiny mortgage, this is still a good product.
"I have had a few clients opting to switch from competitive trackers to fixes while rates remain extremely competitive. I have worked on a seven-year fix for a client who said their situation is unlikely to change in the near future."
Charges
No reservation or completion fees.
Verdict
No reservation or completion fees as well as free legals and standard valuation are music to the ears of those who are seeking to remortgage their homes. However, these benefits come at a cost in the form of an inflated rate of interest.
The latest statistics published by the LMS revealed remortgage lending has hit its highest level for almost eight years. It reached £7.1bn in July, up by more than a quarter from £5.6bn reported in the previous month, and the largest amount since October 2008. Presumably, these individuals have appreciated just how competitive mortgage rates have become. The low interest rate environment seems set to remain the status quo for the near future.
