A fully flexible mortgage

The 'Easy Living' mortgage allows customers to make overpayments; pay off their mortgage early; switch between repayment and interest-only or change their term, at any time throughout the life of the mortgage and without paying a fee. Indeed, the bank claims customers have peace of mind knowing they can apply to borrow more with the same discount without paying a fee, or switch to another product, whenever they like as there's no lock in period. And with none of the usual product fees, valuation fees, legal fees or closing administration fees applying either.

The loan - now available through all Lloyds TSB branches to customers borrowing between £25,000 and £1.5 million on a maximum LTV of 95% - has a 1% lifetime discount on SVR (Standard Variable Rate) up to 90% LTV, giving a current rate of 5.75%. Or a 0.5% discount for up to 95% LTV, giving a current rate of 6.25%.

The bank's own research has found that a quarter of people with a fixed rate mortgage don't even consider the likely costs of re-mortgaging when deciding on a short term fixed rate mortgage.

The research also reveals that the average length of time between switching mortgage products is just 3.5 years - four times more often than the average person moves house. Anyone switching their mortgage every 3.5 years over a 25 year period could typically spend £4,000 on mortgage fees. Furthermore, 9% of people are unaware that they will have to pay these fees.

29% are also unaware that they will have to pay for the cost of Local Authority, Land Registry, Environmental, Drainage and Bankruptcy searches each time they change their mortgage, which can cost up to £494, according to various sources cited by the bank.

31 August 2006 © moneyextra.com