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Flexible principles from Principality

Principality has introduced a flexible mortgage that is a discounted rate base rate tracker mortgage with flexible features.

The mortgage remains at 1.05 per cent below the Bank of England base rate until December 31, 2001, giving a payable rate of 4.20 per cent. It then reverts to 0.80 per cent above the base rate until June 31, 2011.

It is available for loans of up to 90 per cent of valuation and allows underpayments, overpayments, payment holidays and lump sum withdrawals. Interest us calculated on a daily basis.

According to Moneyfacts on May 14, 2001, there are no exact comparisons to this mortgage. However, those looking for a cheaper rate initially could go for the Britannia Building Society flexible base rate tracker. This offers a two year discount in the first six months, giving a payable rate of 4.10 per cent. It then reverts to 0.85 per cent above the base rate for the next 54 months, giving a less competitive rate of 6.10 per cent compare to the Principality mortgage.

During the rest of the mortgage term, Britannia has the edge as it offers a further 0.30 per cent discount. This gives a payable rate of 5.80 per cent compared to Principality&#39s 6.05 per cent.

Both mortgages have the same degree of flexibility. However, those who choose Principality must pay one per cent of the advance if they redeem in the first year, whereas those who choose Britannia do not have to pay a penalty.

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