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Fixed rate mortgages - innovation from the Halifax

Today sees the launch of two new five-year fixed rate mortgage deals from the, with the unique feature of a three-year redemption charge.

For first and second time buyers the mortgage rate is 5.99% fixed until 28.2.13, and for re-mortgage borrowers 6.09% to 28.2.13. Both charge a below average fee of £699 with early repayment charges of 4% to 28.2.09; 3% to 28.2.10; 2% to 28.2.11

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A short-term fixed mortgage rate with a redemption free period is a first. The tide has completely turned, and with extended tie in mortgage products almost extinct, mortgage borrowers are now beginning to benefit from greater flexibility in the long and now short term mortgage markets too.

With the deals such as Stroud & Swindon BS at 5.35% mortgage fixed for five years with a fee of £799 topping the charts, these new mortgage deals from the Halifax are not market leading when compared on mortgage rate and fee alone. But the unique feature of a redemption period of only three years may make this an appealing overall mortgage deal. Greater flexibility and the opportunity to respond to market conditions that may prevail in three years' time could be a welcome feature worth paying that little bit extra for.

A truly unique feature in its market. Let's hope more mortgage lenders take this approach on board - in an unsettled financial market, flexibility is a must have feature for many mortgage borrowers.

Mortgage best buys - Fixed rate mortgages

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