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Product matters

Britannic Money has long claimed, with some reason, to be an innovator in the mortgage market. Following its registration of Cam (current account mortgage) as a trademark, it continues to increase its range with the flexible restart homeloan, which is being rolled out through three packagers.

The deal comes in three guises, ranging from mild to heavy adverse credit history and all the rates are linked to three-month Libor. With the Libor rate set at 4.21 per cent, the rates range from 6.71 per cent to 8.71 per cent for a basic purchase. There are loadings for remortgages, loans over £250,000 and for self-certification, which could add a further 1.25 per cent to the loan.

The rates are not the keenest but this is the first Cam in the sub-prime market and promises to assist borrowers in the repair of credit ratings by using the flexible features. While redemption penalties apply for three years, overpayments of 10 per cent of the original balance may be made each year without penalty. Any overpayments can be drawn back in underpayments or payment holidays, which could be attractive for someone looking to smooth fluctuating income.

One of the criticisms of Cams in the prime market has been the potential for borrowers to mismanage the account to draw back on equity rather than pay off earlier. Clearly, these concerns could be amplified in the sub-prime arena but Britannic Money has applied a safety valve and will only consider an application for the current account facility after 12 months.

David Hollingworth is a mortgage specialist at London & Country Mortgages

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