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Market Harboro&#39 hedges its bets with hybrid loan

Market Harborough Building Society has introduced a hybrid mortgage with

fixed and flexible features and no extended redemption penalties.

The fixed-rate part of the HedgeBetter mortgage is based on a rate of 6.49

per cent for two years. The discount is 2 per cent off the society&#39s

variable base rate for two years, producing a current rate payable of 5.49

per cent.

Flexible features include a portable drawdown facility of up to 80 per

cent and repayment holidays. It also offers the facility for penalty-free

overpayments of up to 10 per cent of the loan during the fixed discount

period.

The maximum split between fixed and discount on the mortgage is set at a

maximum of 90 per cent fixed. All other variations below that level are

acceptable.

Customers do not have to pay mortgage indemnity guarantee fees and the

maximum loan to value is 80 per cent. Minimum loan is £40,000 and maximum

£400,000. There is a one-off arrangement fee of £295.

Chief executive Philip Dearing says: “The HedgeBetter mortgage reflects

the requirement for certainty of repayment on one element of the mortgage,

with the potential to benefit from decreases in the variable portion.”

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