The Loughborough Building Society has launched a variable discounted mortgage this week that offers customers a low 3.39 per cent interest rate over three years – that’s a 1.6 per cent discount on normal rates.

The mortgage has a maximum 80 per cent loan-to-value (LTV) and comes with a fee of £499. Both house buyers and customers seeking to remortgage are eligible for the loan and the building society is also offering a flexible option, whereby borrowers are able to overpay up to 10 per cent of the outstanding balance without any penalty.

The new deal forms part of a set of new variable discounted mortgages being offered by the Loughborough Building Society this week. Hopefully it will lead to a further increase in mortgage activity, building on the rise caused by a rush of first-time buyers aiming to close a deal ahead of the end of the stamp duty holiday in January.
The latest Housing Market Activity Report by Connells Survey and Valuation showed that 43 per cent more residential valuations took place in January 2012 this year than during the same month in 2011.

First-time buyers drove this increase, with a 52 per cent increase in valuations carried out for this group. Ultimately, a third of all valuations carried out in January 2012 were for first-time buyers.

The increased activity took place as the stamp duty holiday for first-time buyers on homes worth up to £250,000 begins to draw to a close, with the official shut-off date on 24 March.

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