Northern Rock has introduced the five-year base rate tracker mortgage.
Until February 1, 2007 the mortgage will be set at 1.5 per cent above the base rate for loans of up to 75 per cent of the property valuation, giving it a payable rate of 5.5 per cent.
The mortgage can be used to buy up to four properties, with the maximum advance for each property set at £250,000 and an overall limit of £1m. There are no penalties if the mortgage is redeemed during the tracker-rate period and there is an arrangement fee of £495. Any expatriate applicants are restricted to a maximum loan to value limit of 50 per cent of the property value.
This is not the most competitive five-year base rate tracker mortgage on the market. According to Business Moneyfacts on November 19, 2001, the lowest rate is from Verso, which has a rate set at 0.98 per cent above the base rate for loans of up to 80 per cent of valuation, giving a payable rate of 4.98 per cent.
The Verso mortgage may have a lower rate than the Northern Rock product, but it also has a redemption penalty of one months interest. Although it can be used to purchase any number of properties, these cannot total more than £500,000, which makes it more restrictive than the Northern Rock mortgage.