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Scarborough fairs well with Cap

Scarborough Building Society is offering a three-year capped rate mortgage that is available for loans up to 95 per cent of valuation with a maximum advance of £250,000.

The mortgage is capped at 5.45 per cent for three years and has an arrangement fee of £295. Borrowers must pay 5 per cent of the amount repaid as an early redemption penalty if they pay off this mortgage during the first three years.

According to Moneyfacts on November 19, 2001, this is the most competitive three-year capped-rate mortgage on the market. Cheshire Building Society provides the most relevant comparison and is capped at 5.89 per cent until August 31, 2004.

It has the same arrangement fee as the Scarborough mortgage, but its early redemption terms are better. Borrowers who pay the Cheshire mortgage off during the capped-rate period must pay 3 per cent of the amount repaid in year one, 2 per cent in year two and 1 per cent in year three.

Free basic valuation and free accident sickness and unemployment (ASU) cover is offered as an added incentive which could be useful for some borrowers. The latest figures from the Council of Mortgage Lenders show that 32 per cent of people who took out mortgages in the first half of 2001 have ASU cover and the expected slowdown in the economy and housing market may boost its popularity further.

However, some borrowers are more concerned with the payable rate than other factors and may prefer the Scarborough mortgage because of its competitive capped rate.



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