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first direct launches new mortgage

03 July 2006
Online banking company first direct has unveiled a new three-year fixed rate mortgage product.

Launched last week (30th June), first direct's new product is available at 5.39 per cent, reverting to a 5.5 per cent mortgage rate after the first three years, with a maximum loan-to-value of 80 per cent.

The offset facility of the new package links day-to-day savings and current account balances to the mortgage itself, so interest is only paid on the difference.

This equates to the average UK couple saving nearly £300 a year if switching from a regular mortgage to an offset product at the same rate of interest.

"Fixed rate home loans have proved a huge hit with homeowners," said Chris Pilling, first direct's chief executive.

"In fact, seven out of every ten is now a fixed rate compared to just ten years ago where it was less than two in ten.

"Homeowners are telling us that they want the comfort of a fixed rate which is why we'll continue to launch such great deals," he added.

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