Accord Mortgages is launching three new discounted Standard Variable Rate (SVR) mortgages which track the lender’s SVR, currently 4.99%, at a discounted rate.
Available at 60% loan to value (LTV) is a two-year discounted SVR mortgage at 1.59%, based on an SVR discount of 3.40%. Borrowers with a 20% deposit can opt for a 1.79% rate, based on an SVR discount of 3.20%, over a two-year period. Those with a 10% deposit can take advantage of a 2.09% two-year deal, based on a SVR discount of 2.90%.
Each mortgage is available to house purchase and remortgage customers and comes with a £495 fee and free standard valuation.
The new mortgages have an interest rate collar of 0.00% so if Accord’s SVR reduced in the two years the variable rate would reduce too – but it would also increase if the SVR rose. The discounted rates apply for the first two years of the mortgage term and will then revert to Accord’s SVR, currently at 4.99%.
The mortgages are designed to give borrowers flexibility as they can redeem their mortgage at any time during the discounted period and will only incur a 1% early repayment charge (ERC), which is lower than that of Accord’s typical fixed rate ERCs.
Also each home loan is portable, meaning customers can transfer their mortgage to a new property without charge.
David Robinson, national intermediary sales manager at Accord, said: “We recently reduced our standard variable rate by 0.35%, so it feels fitting to launch new mortgages that are linked to it.
“Whilst there was a minimal increase to the Bank Rate in November this doesn’t appear to have quashed the appetite for variable rate mortgages. A discounted SVR mortgage allows us to offer a competitive rate for those who want to keep repayments as low as possible but who understand the rates, and therefore their payments, may go up or down in future.
“It’s important that brokers reinforce the variable rate message to help their clients factor it into their budget but nonetheless we’re sure our new mortgages will be a welcome addition to our range.”