Leek United Building Society has launched two fixed-rate deals.
These include a two-year 75 per cent loan-to-value (LTV) fixed-rate residential mortgage, offering homebuyers what it claims is a competitive rate of 1.94 per cent, fixed until 31 October 2020.
Leek United is also targeting first-time buyers with a five-year fixed rate residential mortgage deal offering 95 per cent LTV, fixed at 3.94 per cent until 31 October 2023.
Both products have no product or application fee and come with £500 cashback. Homebuyers can also make10 per cent overpayments each year, without incurring any penalties.
Last month, Leek also made some changes to its buy-to-let fixed rate offering. Exclusively for TMA Club advisers, the fixed rate product at 1.84 per cent is available on loans up to 75 per cent of the value of the property, with product application fees of £100, which can be added to the loan or paid upfront.
The offering is available to both portfolio and non-portfolio landlords.
The building society said it had launched these products in a bid to help customers at a time when interest rate rises are looming.
According to UK Finance, borrowers are increasingly choosing longer term fixed rates, as they look to lock in rates ahead of an anticipated interest rate rise. Nearly half of all the fixed-rate lending so far this year has been for five years or more, compared to less than 30 per cent two years ago when the clear preference was for two years.
A spokesperson for Leek United Building Society said: “Both new mortgages have the added bonus of no product or application fees, £500 cashback on completion – and are available on new-build properties, with a speedy 28-day ‘application to offer’ turnaround. Add to that the option for homebuyers to make 10 per cent overpayments each year without incurring any penalties, and we don’t expect these offers to be around for long.”
Adviser view Alan Lakey, director at Highclere Financial Services, said: “These are both attractive offers. There are lower interest rates, but generally they come with fees and no cashback.
“HSBC has an appealing two-year alternative with 1.49 per cent and only a £99 fee. If borrowing £300,000 over 25 years this becomes £64 a month less than Leek. The five-year fix is also extremely competitive. The Cambridge has a special deal with the L&G Mortgage Club offering 3.7 per cent with a £175 fee and £250 cashback. The monthly cost over 25 years for a loan of £380,000 on a £400,000 purchase is £51 a month less than Leek. Overall these are very good offers.”
No product or application fee is applicable.
Currently in the market there are rates that are lower than those offered by Leek United, but if you take into account the whole offering, with the cash back and no fees, the deal works out to be quite competitive from Leek United Building Society.