by Gary Webber
28. September 2009 13:37
Leeds Building Society is launching a cheap tracker mortgage at 3.2%...
– or you can pay 3.7% on a similar deal with no lock-in.
There are two new tracker mortgages on offer and one fixed-rate deal. The lowest initial interest rate is available on the two-year mortgage tracking at 2.7% over Base Rate. It's limited at 75% loan to value, with total fees of £599. This mortgage allows you to repay up to 10% of the capital each year without penalty.
Oddly, the higher rate deal (currently 3.7%, tracking at 3.2% over base rate) has lower loan to value limits (70%) and higher fees (£999). Why's that?
The difference is that the latter deal can be paid off at any time without penalty. If you suspect you might want to clear large chunks of the capital at once, this deal could be better over the term.
Continuing the 'no handcuffs' theme, Leeds also introduces a two-year 4.6% fixed rate mortgage that lets you repay unlimited capital at any time without penalty. Total fees are £999 and the loan to value limit is 70%.
Reallywannatracker?
I don't really understand the strength of demand for trackers at a time when the Bank of England is unlikely to make any further cuts in its rate. However, if you're betting on base rates staying under 1.5% for the next couple of years, the interest would cost you less with the tracker than with the fixed—so that's a bet you might be happy to take.
And if freedom's your thing, Leeds Building Society clearly has a thing for non-locked-in mortgages, so they'd certainly be worth a look.
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