Northern Rock has introduced together connections 90 per cent, a flexible mortgage that tracks the Bank of England base rate for four years.
The mortgage stays at 1.49 per cent above the base rate until January 1, 2005, giving a payable rate of 6.74 per cent. It is available for loans of up to 90 per cent of valuation.
Underpayments, overpayments, payment holidays and lump sum withdrawals can be made and interest is calculated daily. There are no redemption penalties.
This is not a current account mortgage, but borrowers can take out an unsecured personal loan, a credit card, a savings account and a current account at the same rate as the mortgage.
According to Moneyfacts on June 11, 2001, there are no exact comparisons to this mortgage. The Halifax has a flexible base rate tracker that is available up to 90 per cent, has no redemption penalties and allows borrowers to take out personal loans at the same rate as the mortgage. It remains at 0.5 per cent above the Bank of England base rate until August 31, 2006, giving a payable rate of 5.75 per cent.
The Halifax mortgage has a lower rate than the Northern Rock mortgage, but it is slightly less flexible as borrowers must set up a facility called home cash reserve before making lump sum withdrawals. Although borrowers can take out personal loans at the same rate as their mortgage with both lenders, they can only do so for savings accounts, current accounts and credit cards with Northern Rock.