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Newbury introduces tracker

Newbury Building Society has established a tracker mortgage that calculates interest on a daily basis.

The Newbury daily tracker will track the Bank of England base rate until December 31, 2005. Loans of up to 75 per cent loan to valuation will be 0.59 per cent above the base rate, loans between 76 per cent and 90 per cent of valuation will be 0.69 per cent above the base rate and loans between 91 and 95 per cent of valuation will be 0.99 per cent above the base rate.

The daily interest and the ability to overpay are additional features with make the mortgage more flexible than similar base rate trackers. However, this is not a flexible mortgage so borrowers who want the ability to underpay, take payment holidays and make lump sum withdrawals would not find this mortgage attractive.

The Newbury mortgage compares favourably to other mortgages in terms of interest rates on loans up to 90 per cent of valuation but it is not so good for loans between 91 per cent and 95 per cent of valuation. According to Moneyfacts, Melton Mowbray Building Society is offering a base rate tracker at 0.75 per cent above the base rate for five years on loans up to 95 per cent of valuation.

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