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Pink fixed-rate is a cut above

Pink Home Loans has introduced a three-year fixed-rate mortgage that has an extended tie in.

The mortgage is available for loans of up to 95 per cent of valuation and is fixed at 4.99 per cent until November 30, 2004. Borrowers are tied in for an extra two years. If they pay the mortgage off before November 30, 2006, they must pay an early redemption penalty of 5 per cent during the fixed rate period and 4 per cent during the following two years. A £100 redemption administration fee is also applicable.

According to Moneyfacts on September 19, 2001, this mortgage is the most competitive deal of its type. The closest competitor is from Norwich & Peterborough which is fixed at 5.19 per cent for three years. It also has an early redemption penalty for borrowers who pay off the mortgage during the first five years, but differs in that a flat penalty of six months&#39 interest is payable. This amounts to a lower penalty than Pink Home Loans.

Most borrowers are also charged a higher mortgage indemnity guarantee (MIG) with Pink Home Loans. It charges a MIG of 7.25 per cent for loans between 85 and 90 per cent of valuation and the rate of 8.65 per cent for loans between 90.01 per cent and 95 per cent of valuation. Norwich & Peterborough makes a flat charge of £50 for loans between 75 per cent and 89.99 per cent of valuation and makes a MIG charge of 8 per cent for loans between 90 and 95 per cent of valuation.

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