Portman Building Society has introduced a two-year discounted rate mortgage that has no arrangement or early redemption fees.
A 1 per cent discount is offered until August 1, 2003, giving a payable rate of 5.54 per cent. This mortgage is available for loans of up to 95 per cent of valuation and no mortgage indemnity guarantee is payable for loans of up to 90 per cent of valuation. Borrowers who take out higher loans must pay £8.50 for every £100 they borrow above 90 per cent of the property value
According to Moneyfacts on June 20, 2001, Norwich Union has a 2-year discounted rate mortgage that also has no arrangement or early redemption fees. It has a more competitive rate than the Portman mortgage. At 1.79 per cent discount is offered for the first two years, giving a payable rate of 5.05 per cent. However, those who borrow above 90 per cent must pay a higher mortgage indemnity guarantee at £8.95 for every £100 borrowed above 90 per cent of valuation.
This means that someone buying a property worth £80,000 and borrowing 95 per cent of its value would pay a mortgage indemnity guarantee of £365 with Norwich Union and £340 with Portman Building Society.