Accord has introduced seven new two-year discounted standard variable rate (SVR) mortgages.
The new range provides options for borrowers with differing budgets, from a 5% to a 40% deposit, and tracks the lender’s SVR, currently at 4.99%.
For example, a borrower with a 10% deposit could take advantage of Accord’s 1.64% two-year discounted SVR mortgage, which is 0.81% below the 2017 market average rate for a two-year fixed deal at the same loan-to-value (LTV).
While borrowers looking for a 75% LTV mortgage could make a saving by choosing Accord’s 1.29% discounted SVR, compared to the 2017 market average of 1.54% for a two-year fix with an equivalent deposit.
The two-year range comes with a £495 product fee and free standard valuation, with the exception of a market-leading[ii] 0.97% option at 60% LTV which has a £1,495 and no additional features.
The range is available to both house purchase and remortgage customers, apart from the 2.99% mortgage at 95% LTV which is designed for purchase customers only.
The mortgages are designed to give borrowers flexibility as they can redeem their mortgage at any time during the discounted period and will incur a 1% early repayment charge (ERC), which is lower than that of Accord’s typical fixed rate ERCs.
Ben Merritt, mortgage manager at Accord, said: “Discounted standard variable rate mortgages may be a good option for borrowers who want to benefit from lower monthly repayments given the rates are similar to that of fixed rate deals.
“Whilst the rate on these types of mortgages can go up as well as down, with our highly competitive range customers could potentially withstand a number of rate increases before their rate becomes higher than the market average[iii] which could mean customers pay less even if rates do go above that of a fixed rate offering.
“Borrowers on discounted SVR mortgages can come out of their deal at any time, with lower costs than their fixed rate equivalents, which gives them options to move their mortgage if rates do rise.
“It’s important that brokers reinforce the variable rate message to help their customers factor it into their budget but nonetheless we’re sure our new mortgages will appeal to borrowers looking for flexibility and competitive monthly repayments over a short period.”