The bank has cut its £1499 fee to £999 on two and five-year fixed rates, with a 60% loan to value (LTV) offered at 1.29%.
Scottish Widows made a raft of changes to its interest-only repayment options earlier this week and began accepting bonuses as a repayment vehicle in certain circumstances. A minimum of £50,000 cash will be accepted as long as it has been in a savings or current account for longer than three months.
Scottish Widows has also adapted the standing terms for repayment vehicles, for example, if borrowers are looking to use their pension, then the projected total fund value rather than current figures will be accepted. The projection must be a minimum of £400,000 of which 15% will be used for interest-only.
And for final salary pensions where no projected value is provided, the tax-free lump sum must be a minimum of £100,000, of which 60% will be used for interest-only.
Last year, Scottish Widows introduced the ‘sale of mortgaged property’ repayment vehicle for interest-only borrowers, with a maximum loan-to-value of 50% (other repayment vehicles can be used to borrow up to 75% LTV). It also requires that there is at least £200,000 equity in the property.
Martin Fleming, managing director, Scottish Widows Bank, said: “Kicking off the year with our lowest ever remortgage rates set us off to a great start, but these changes announced today – as well as expanding our interest-only repayment options – really put us at the forefront of the market.
“Helping brokers continue to meet the needs of clients by offering the flexibility off offsetting built-in helps borrowers save money by remortgaging whilst maintaining a cash reserve –without having to choose between competitive rates and offset.”