Spotlight On: Leeds 5-year fixed rate

Simon Read
Saturday 30 October 2010 00:00 BST
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The deal

Leeds Building Society has cut its 5 Year Fixed Rate Mortgage to 3.94 per cent.

Good points

The rate is decent, although not the best, but the building society has reduced the amount of deposit homebuyers need from 40 per cent to 25 per cent, which should open the offer up to more potential buyers. There is no higher lending charge and borrowers are allowed to repay up to 10 per cent of the loan each year without penalty.

Bad points

There's some smoke and mirrors going in with the headline rate which is actually a less impressive 4.18 per cent. To get the 3.94 per cent deal you have to take out Leeds' Homecover insurance for the length of the loan. There's also a £199 Booking Fee as well as a separate £800 Completion Fee.

Conclusion

Leeds is playing a little fast and loose here but the deal is worth looking at if only because they've reduced the deposit needed. But it demonstrates the importance of looking beyond the headline rate and studying the small print.

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