Principality Building Society has introduced lower interest rates at maturity for a range of its residential mortgage loans.

The mutual says at the end of the fixed mortgage product term, rather than reverting to the standard variable rate (SVR), interest rates for customers who hold a stepped reversion rate mortgage will be 1% less than SVR for a period.

Residential products that are part of the stepped reversion range include all two and three-year fixed mortgage products, as well as any five-year discounted mortgage products.

It adds, the cut in reversion rates will impact the calculations used by the building society to assess a customer’s affordability for a mortgage, potentially increasing the maximum the firm will lend to new customers applying for a stepped reversion mortgage.

Higher maximum lending is subject to further affordability checks and criteria.

Two-year fixed products will see customers will offered SVR -1% interest rate for a three-year period. Five-year discount products will have one year on the reduced SVR interest rate.

Early repayment charges do not apply to products in this range while SVR -1% applies.

Cardiff-based Principality is the UK’s sixth largest building society, and lends across England and Wales offering a range of residential mortgage products, such as joint borrower sole proprietor and Help to Buy in England and Wales to support first-time buyers.

Principality Building Society head of products Morgan Miles says: “Customers who hold a stepped reversion mortgage will see the costs of monthly repayments reduced at the end of their product term when they would usually be reverted to a standard variable rate of interest.”