Despite the current depressed mortgage market, the low Bank of England base rate means there are
some very attractive mortgage deals out there. Lloyds TSB have recently launched their lowest ever
fixed rate mortgage deal.

The three-year fixed rate of 3.74% is available to first time buyers and home movers, as well as
remortgage customers. On the surface it certainly seems like an attractive proposition, particularly
at a time when many mortgage advisers are strongly recommending medium-term fixed rate
products. But is there a catch?

First of all, you need to hold a current account with Lloyds TSB to qualify for the rate. For non-
current account customers, the rate increases to 3.94%. The product is only available for those who
can put down a deposit of 25%.

The deal also comes with a relatively high product fee of £1,495. It also includes a tie-in clause with
Early Repayment Charges if you repay or move your mortgage within the three years. The penalties
are 3% in year one, 2% in year two, and 1% in year three.

The company’s commercial director of mortgages, Stephen Noakes, said, “This product has been
designed to give our customers choice. For some borrowers having low up front costs is a priority,
but with increasing commentary about potential interest rate rises over the coming year, many
borrowers will be looking for the security of lower monthly payments for the next three years which
this product provides.”

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