Leeds Building Society has expanded its fixed term mortgage range with new two-year deals, which the company said would give fixed term borrowers more choice.
Features in the range include: a 1.39 per cent fixed rate up to and including 31 July 2020, available up to 65 per cent loan to value (LTV), and 1.44 per cent fixed up to and including 31 July 2020, available up to 75 per cent LTV.
The offering is available for home purchases or remortgages and comes with a free standard valuation.
Both products come with tapered early repayment charges during the fixed term – 3 per cent and moving down to 2 per cent until 31 July 2020, and up to 10 per cent capital overpayment allowed penalty-free each year.
Two-year fixed-rate deals have grown in popularity, according to a recent study from the FCA.
In research carried out for its Mortgage Market Study, the FCA found speaking to an intermediary increased the likelihood of choosing a two-year fixed rate home loan by 14 percentage points and decreased the likelihood of choosing a five-year fixed rate deal by 8 percentage points.
Leeds Building Society has also made changes to its Isa range.
Earlier this month FTAdviser reported that the building society had launched what it claimed was a unique 12-month tracker Isa to add to its range of tax-free savings products.
The lender said its "mission” was to help people save and have the home they want by trying to understand savers and develop products to meet their needs.
The instant access Isa is aimed at providing an opportunity for members to benefit from future Bank of England base rate increases.
The product comes with a rate of 0.96 per cent tax-free a year, annual equivalent rate.
The tracker Isa is limited issue and can be opened and operated online, in branch or by post, and offers penalty-free access, while transfers in from previous years’ Isa subscriptions are permitted.
The minimum investment is £1,000 and the fund matures on 2 June 2019.
Withdrawals or transfers are permitted without notice or loss of interest.
Provider view:
Martese Carton, head of intermediary distribution at Leeds Building Society, said: “These new two-year fixed rate deals are among the lowest rates for this type of product available through intermediaries.
“We listen and respond to borrower and broker feedback when developing products – we expect these new additions to our fixed rate range to appeal to borrowers who want to keep down their monthly repayments while also benefiting from the security of payments offered by a fixed rate deal.”
Adviser view:
Carl Shave, director at Just Mortgages, said: “The revised fixed rates introduced by Leeds Building Society sees its two-year offerings sit in the headline rate bracket for the respective loan-to-values.
“The slightly higher arrangement fee compared to the very best two-year products in this category will limit their appeal, however, they will still be quoted as a viable option for some where criteria is a factor.”
Fees/charges:
Product fee is £1,999
Verdict:
The offering may not be as competitive as others when it comes to product fees but it does bring additional choice to the sector.
