New A&L mortgage range offer a gentle start

Alliance & Leicester has launched a new range of prime mortgages, headed by a 'low start' two-year fixed-rate loan which lets customers pay interest of just 5.34 per cent until the end of September 2009.

The product is designed to ease the initial financial strain, although customers will pay 0.74 per cent above the Bank of England interest rate for one year after the introductory period expires and go on to pay the lender's standard variable rate, now at 7.89 per cent but likely to change.

Customers can borrow up to 95 per cent of the value of their property, although there are penalty charges for early repayment and overpayments are capped at ten per cent of what is owed.

Also in the range are the two-year 'discount deal', which fixes at 5.55 per cent for two years then reverts to standard variable rate, or the two-year base-rate tracker mortgage, fixed at 5.44 per cent for two years, then following Bank of England rates plus 0.99 per cent.

Meanwhile, first-time buyers were this week wooed with Alliance & Leicester's joint mortgage and loan, the PlusMortgage, which aims to liberate buyers' funds to help them afford improvements to their home.

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