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Principality tracks the flexible market

Principality Mortgages’ tracker flexible mortgage has joined the 93 similar products on the market.

It is available for loans of up to 90 per cent of valuation. For the first year of the loan it will run at 1.05 per cent lower than the Bank of England Base Rate, giving it a payable rate of 4.2 per cent. For the next nine years it will run at 0.8 per cent above the base rate.

The mortgage offers payment holidays, overpayments, underpayments, lump sum withdrawal and interest calculated daily. Any valuation fees are refunded and the mortgage has redemption penalties of 1 per cent of the advance until August 31, 2002.

According to the Council of Mortgage Lenders 2000 annual mortgage survey, only 16 per cent of Britains population have a flexible mortgage, while only 6 per cent of flexible mortgage holders have ever used their ability to take a payment holiday.

Looking at data supplied by Moneyfacts on May 17, 2001, the Principality mortgage is the most competitive available. The next most competitive is the flexible mortgage from Birmingham Midshires. This fully flexible mortgage tracks the Bank of England base rate for the first six months, giving it a payable rate of 5.25 per cent for loans of up to 90 per cent of valuation. After this it is set at 0.75 per cent above the base rate. The only redemption penalties are the payment of a £75 vacating fee and a deeds fee of £40. Unlike the Principality mortgage this also has an administration fee of £299.

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