Scottish Widows lends graduates a hand onto the ladder

Graduates will soon have a greater variety of choice when it comes to the difficult decision of mortgages.

Scottish Widows is set to extend its graduate mortgage range by offering an increased selection of interest rate options.

The telephone mortgage provider will introduce a new "staggered" discount system, which works over a three-year period, while maintaining a two-year fixed rate. The discount will alter gradually over the period, starting at a one per cent saving in the first year, 0.5 per cent in the second, and 0.25 per cent in the final year.

The new range of graduate orientated mortgages will come into effect from March 24th and will run in conjunction with the existing 5 year fixed rate and discounted tracker product.

The business development director of Scottish Widows Bank, Gordon Bowden, explained the thinking behind the new scheme: "The aim of extending the range of options available on our Graduate Mortgage is to further help first time buyers onto the property ladder. In today's property market, providing a greater choice gives graduates a solution when buying their first home."

Graduates can also benefit from the "top-up" facility, where a named guarantor can guarantee an amount that exceeds that of the graduate's borrowing capacity.

Scottish Widows' standard variable rate is currently set at 5.24 per cent. The two year fixed rate is 4.98 per cent for loans that cover up to 90 per cent of the property's value, and 5.28 per cent for loans applying to over 90 per cent.