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Exclusive Connections ties to base rate

Exclusive Connections is working with the Bank of England with the base rate tracker mortgage.

The interest rate will be set at 0.75 per cent above the Bank of England base rate for the term of the loan for loans of up to 95 per cent of valuation for first-time buyers and 90 per cent for remortgages. In addition there will be a 0.5 per cent discount in the first year, giving it an initial rate of 5.25 per cent.

Applicants are allowed a maximum of one county court judgement against their name, or a maximum of £250 in mortgage arrears.

There is an arrangement fee of £295 and an early redemption penalty of three months interest in the discounted period. This mortgage is also fully portable.

Base rate tracker mortgages tend to appeal to people who do not want to review their mortgages often. They are happy to link the mortgage to an interest rate that does not fluctuate wildly.

According to Moneyfacts on August 21, 2001, the most competitive discounted base rate tracker mortgage is from Bank of Ireland Mortgages. This fully portable mortgage has a rate of 0.5 per cent above the base rate for the term of the loan, with a 1 per cent discount for the first year giving it a payable rate of 4.5 per cent for loans of up to 95 per cent of valuation.

Breaking down the costs of the two mortgages, according to London & Country Mortgages the Exclusive Connections mortgage will have monthly repayments of £606.17 and the Bank of Ireland mortgage £555.83. The biggest difference between the two mortgages is the cost of early redemption. If redeemed in the first year the Exclusive Connections mortgage will have a charge of £1,532.50 and the Bank of Ireland mortgage £5,110.

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