Legal & General is launching a flexible repayment mortgage as the trend for borrowers to move away from interest-only deals gathers pace.
John Cupis, L&G’s mortgage marketing director, said the deal would give L&G customers the certainty of paying off the loan, but with the option of doing so faster.
He said: “We are filling a gap in our product range. Not only does the borrower have certainty of payment, but they also retain the option of keeping flexible overpayments so they can pay off the loan faster.”
Figures from the Council of Mortgage Lenders show repayment mortgages are becoming increasingly popular, especially among first time buyers.
Cupis said: “It gives customers flexibility and certainty. Other leading lenders in the flexible market offer the same type of deal and we thought it was about time L&G did the same.
“By combining repayment and flexibility we are offering the best of both worlds – repayment certainty and the ability to redeem the loan early.”
The product is available from 3 April and will be available as an option across the entire range of L&G flexible products, with no restrictions. It starts at a discounted rate of 5.35%.
l Skipton Building Society has launched a flexible remortgage, offering direct customers a three-year discounted variable rate from 6.24%.
The deal offers daily interest calculation as well as a range of discounts, from 0.65% to 1.25%, free legal fees or £250 cashback and valuation fee refunded.
Up to three months’ payment holiday is also available provided sufficient overpayments have been made.