TSB launches new five-year fixed mortgage – with no early exit fee after three years

The bank has today announced it is launching an “industry first” – a five-year Fix and Flex Mortgage (zero to 80 percent LTV). This mortgage will offer borrowers the reassurance of a fixed rate for five years, without the requirement to be tied in for that time frame.

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Rather, customers will have the flexibility to refinance or leave the mortgage after three years, without having to pay an early repayment charge.

The Fix and Flex product will be available for TSB’s residential remortgage customers from today.

Meanwhile, it will be available for both first-time buyers and home moves from July 17.

The announcement has come at a time when almost 40 percent of Britons are worried about their finances since COVID-19 began earlier this year, research from TSB has found.

According to the research, 33 percent of Brits are now saving more for post lockdown life.

Roland McCormack, TSB’s Director of Mortgages said: “We understand that now, more than ever, people’s circumstances can change.

“Fix and Flex offers our customers the comfort of a fixed monthly payment with the ability to leave their mortgage deal after three years, without having to worry about an early repayment charge.

“We want our customers to feel money confident and more in charge of their finances when they bank with us and this new product is designed to help them do exactly that.”

The Five-Year Fix and Flex will offer market competitive rates from 1.99 percent, with no product or application fees, TSB said.

Commenting on the news, Rachel Springall, Finance Expert at Moneyfacts, said: “It is great to see a well-known lender supporting borrowers at a time of great uncertainty and a flexible mortgage can give borrowers some peace of mind.

“Interest rates are very competitive on mortgages right now, and consumers may well wish to lock into a longer-term fixed rate if they fear interest rates will rise in the coming years.

“However, by locking into a five-year fixed deal, this usually means paying an early repayment charge until the initial rate has come to an end if borrowers decide to switch early.

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“This may not be ideal for those who see their circumstances change in the next few years.

“This Fix and Flex deal will allow borrowers to exit after three years without paying a penalty and this may well entice customers considering their options right now.

“TSB also offers ten-year fixed mortgages, of which borrowers will be able to exit after year five without a penalty.

“It is good to see these new five-year Fix and Flex deals come into the market for those unsure about what may happen in the years to come.

“As always, borrowers would be wise to seek independent financial advice to go through their options before they commit to any deal.”

Elsewhere, an analysis by Experian has found that millions of UK borrowers could potentially save themselves thousands of pounds on their mortgage payments by switching to a new fixed rate offer.

The credit reference agency has found that up to 44 percent of the UK’s 10.8 million mortgages are likely to be on their provider’s Standard Variable Rate (SVR).

Research has found that SVRs can be more than double the interest rate of the lender’s original introductory offer.

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