Mercantile Building Society has brought in the 2.35 per cent discount mortgage.
The mortgage offers a 2.35 per cent discount from the Mercantile's standard variable rate, giving it a payable rate of 5.24 per cent for two years for loans up to 75 per cent of valuation. After this period the mortgage will revert to the standard variable rate.
There are no extended redemption charges and the mortgage has income multiples of 3.5 times principal income plus second or 2.75 times joint. This makes it higher than the industry norm of three times principal income plus second or 2.5 times joint.
According to Moneyfacts the cheapest two-year discounted mortgage on the market on October 13, 2000 is from the Woolwich, which has a payable rate of 4.25 per cent, and identical redemption penalties.