Skipton has relaunched its range of three-year fixed rate products in response to rising demand for longer-term options.
The products are available for purchase and remortgage, with rates of 1.71 per cent to 60 per cent loan-to-value (LTV), 1.85 per cent to 75 per cent LTV, 2.05 per cent to 80 per cent LTV and 2.61 per cent to 90 per cent LTV.
All of the loans are all fee-free, and come with free valuations and free legal fees for remortgages.
Longer-term fixed rate deals are becoming more and more popular due to Brexit-related uncertainty and the possibility of a hike in interest rates in the near future.
As a result, several lenders have recently launched three-year deals, including Nationwide, Barclays and Accord.
Kris Brewster, Skipton’s head of products, said: “For many borrowers, getting the best mortgage deal available for your specific needs has never been more important in the current mortgage market.
“We’re seeing a trend of more people wanting to look at longer term fixes but the gap between the two and five-year deals can be just a little bit too much for some.
"Offering a three-year deal bridges this a little, and gives people that extra choice and ability to lock in the current low interest rates for a little longer.”
Jane King, mortgage adviser at London-based Ash-Ridge, said: “We are a bit short on three-year products at the moment, so another one into the market is good. The only downside of Skipton is they tend to be a bit conservative on affordability.
“A lot of my clients are doing three-year fixes. There will always be people who want two years, but for people who are fairly settled three years is useful. That is why this launch from Skipton will be really popular.”
Skipton's deal comes as a mortgage network has criticised advisers who focus on two-year ‘cash-cow’ deals, a move it said is against the best interests of clients.
JLM Mortgage Services, which is independent, nationwide and has 43 advisers across seven firms, has pointed to a large proportion of intermediaries influencing the market in favour of two-year deals.
This, it suspects, is in order to generate short-term increases in transactions and fees.
With the UK’s exit from the European Union set for 2019, advisers and organisations that are heavily promoting such short-term deals are effectively dropping their clients into an uncertain environment when their rate ends in two years’ time, the network said.
simon.allin@ft.com
