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Mercantile fix for customers with cash

The Mercantile Building Society has brought in the 5.99 per cent fixed rate mortgage.

The interest rate is fixed at 5.99 per cent for the first two years of the mortgage for loans up to 75 per cent of valuation. After the fixed rate period the mortgage reverts to Mercantile’s standard variable rate, which is currently 7.59 per cent.

The income multiples for the scheme are 3.5 times principal income plus second or 2.75 times joint, which places the mortgage slightly higher than the industry norm of three times principal income plus second or 2.5 times joint. Redemption penalties are three per cent of the advance in the first two years and the mortgage comes with one years free unemployment insurance.

This mortgage is not that competitive when compared to some of the others available on the market. According to Moneyfacts on January 3, 2001 the cheapest two-year fixed rate mortgage for loans of up to 75 per cent of valuation on the market is from the Yorkshire Building Society. This has a fixed rate mortgage of 4.99 per cent for the first two years, but redemption penalties are higher at five per cent of the advance in the first two years.

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