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Short-term loan deals from Rock

Northern Rock is launching two fixed term and rate loans aimed a borrowers wanting to repay their loan over shorter terms than the traditional 25 years.

The Guarantee Repayment 10-year fixed mortgage has a rate of 5.59 per cent for the lifetime of the loan, with the 15-year option repayable at the same rate.

The mortgage bank says that by offering fixed terms of 10 or 15 years rather than the standard 25 years, customers can make substantial savings. It highlights how repaying a £100,000 loan over 15 years could save a borrower more than £37,000, while over 10 years this saving increases to £54,000.

Both loans offer a cashback option of £1,500, repayable in full if the mortgage is redeemed within the first five years or in part thereafter.

The loans are available up to 95 per cent loan to value and there is an arrangement fee of £495.

Redemption penalties on the 10-year loan are 7 per cent in years one to three, 5 per cent in years four to six and 3 per cent for the remainder of the term. On the 15-year product the penalties are 7 per cent in years one to five, 5 per cent in years six to 10 and 3 per cent for the remaining term.

Sales and marketing director Andy Kuipers says: “As well as peace of mind and the certainty that monthly repayments will not increase during the entire term of the mortgage, borrowers can look forward to owning the property outright much sooner than the usual 25-year term.

With a guaranteed rate, guaranteed term and the shorter repayment period, this product will especially appeal to homebuyers in the 40-plus bracket looking to clear their mortgage before retirement while benefiting from substantial savings on the amount repaid.”

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