Charcol insists discount mortgages still offer equally as good value as fixed rates, if not bet...
Charcol insists discount mortgages still offer equally as good value as fixed rates, if not better, even though rates are widely expected to rise later this year.
The comments come as the independent mortgage and financial adviser launches its own discounted mortgage which it claims to be a market leader.
The product offers a 1.95% discount, to August 2004, which gives a current initial pay rate of 3.8% or 5.6% APR.
Ray Boulger of Charcol said: "Some borrowers will prefer the easier budgeting provided by a fixed rate but those prepared to take a view on interest rates can expect to save even more money over the next two years with a good discount mortgage, despite the fact that Bank Base Rate is likely to start rising later this year."
Boulger explained: "The current margin between fixes and discounts is such that the Base Rate would have to increase very significantly, probably by around 2%, depending on the timing of the increases, for deals such as this to end up costing more than a fixed rate over the 2 years. It is worth noting that a 6% Bank Base Rate was the peak of the last interest rate cycle, despite the average City view being that it would peak at around 6.75%!"
The product includes a free valuation, free legals on remortgages, penalties only during discount period and is available to 95% loan to value.
Borrowers should contact 0800 71 81 91 or visit www.charcolonline.co.uk
MIG free to 90%
Early Redemption Charge: 6 months interest at the discounted rate to 31/07/04
Lender's fee: £295
Charcol booking fee: £49
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