Spotlight On: First direct's 3-year fixed rate

 

Simon Read
Friday 31 August 2012 22:45 BST
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The deal

The bank is launching a three-year, fixed-rate offset mortgage on Monday at 2.74 per cent

Good points

The rate is the lowest, 65 per cent loan-to-value, three-year, fixed rate on offer, and the lowest in the UK since 2007.

Bad points

There's a whopping fee of £1,499. There really is no need for such huge fees and lenders should up the interest rather than tricking borrowers with lower rates and massive charges.

Conclusion

Offset mortgages aren't suitable for all, but if you intend to overpay – which is a very sensible way to reduce the cost of a mortgage – then this sort of deal could be right for you. But do take into account the excessive fee charged which may mean that a more expensive interest rate would actually work out cheaper.

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