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Portman fix its sights low

Portman Building Society has brought in the 3.99 per cent fixed rate mortgage.

The mortgage has a fixed rate of 3.99 per cent for loans of up to a maximum of 95 per cent of valuation for the first two years of the mortgage. After this period it reverts to the standard variable rate, which is currently 7.49 per cent.

It has extended redemption penalties of five per cent of the advance for the first five years of the loan and an administration charge of £400.

It is also the seventh most competitive two-year fixed-rate mortgage on the market. According to Moneyfacts on December 14, 2000 the cheapest mortgage on the market is the 3.49 per cent mortgage from The Mortgage Operation (TMO) which has a fixed rate of 3.49 for loans up to a maximum of 90 per cent and an administration charge of £595.

Comparing the two mortgages, they both contain elements that the customer should be aware of. On the one hand the TMO mortgage has a better fixed rate and lower extended redemption penalties of one per cent of the advance for the first five years of the loan. On the other, the TMO mortgage has a maximum valuation of 90 per cent of valuation, which will make it less attractive to first time buyers, as well as a higher administration charge.

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