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L&G caps the mortgage market

Legal & General’s Mortgage Club has introduced the 5.35 per cent capped rate mortgage.

Aimed at first time homebuyers and people looking to remortgage, the product has a capped rate of 5.35 per cent for loans of up to 95 per cent of valuation for the first two years of the loan. The early redemption charge is six months’ interest for the capped term.

The mortgage has income multiples of four times principal income plus second for loans of up to 90 per cent of valuation and 3.75 times principal income plus second for loans of up to 95 per cent valuation. These are above the market norm of 3.5 times principal income plus second.

The Legal & General product is one of the cheapest two year capped rate mortgages on the market. According to Moneyfacts on February 6, 2001, its only competitor is the 5.35 per cent capped rate mortgage from the Woolwich. This is available for loans of up to 95 per cent of valuation and has redemption penalties’ of six months interest for the capped rate period.

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