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Principality continues fixed rate surge

Principality Building Society is continuing to fix its mortgage rates with the introduction of the three-year fixed-rate mortgage.

The mortgage has a fixed rate of 5.89 per cent until November 30, 2004 and is available for loans of up to 95 per cent of valuation for new homebuyers. People looking to remortgage are restricted to loans of up to 90 per cent of valuation.

Principality will refund any basic valuation fees if its own valuation experts are used and the mortgage also comes with compulsory buildings and contents insurance. The mortgage also has a redemption penalty of 2 per cent of the advance during the fixed-rate period.

Principality has brought in this mortgage at a time when fixed-rate mortgages continue to sell well. The latest figures from the Council of Mortgage Lenders reveal that I n the first quarter of 2001 a total of 132,000 fixed-rate mortgages were sold in Britain. By the second quarter of 2001 this had risen to 158,000 mortgages.

IFAs looking for a lower interest rate for clients should be aware that the lowest rate on the market for a three-year fixed-rate mortgage is from Woolwich Building Society. According to Moneyfacts on September 20, 2001 this has a fixed rate of 4.89 per cent until November 30, 2004 for loans of 95 per cent of valuation for new homebuyers and 90 per cent for people looking to remortgage.

The Woolwich mortgage also has a redemption penalty of six months’ interest during the first two years, making it far more competitive in terms of both interest rate and redemption penalties than the Principality product.

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