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Teacher&#39s BS form master plan

Teacher&#39s Building Society has introduced the cashmaster mortgage plan, a five-year discounted rate mortgage with a cashback.

This mortgage is available for loans of up to 95 per cent of valuation and has a 0.25 discount for the first five years. This gives a current payable rate of 6.49 per cent and borrowers who redeem during the discount rate period must pay 4 per cent of the sum repaid as a penalty.

The cashback offered depends on the size of the loan. Borrowers with a mortgage of up to 75 per cent of valuation get a cashback of 2.5 per cent of the loan and those with a mortgage of up to 95 per cent get a 2 per cent cashback. There is no arrangement fee.

According to Moneyfacts on August 13, 2001, Principality has a similar deal for loans of up to 95 per cent of valuation which has a more competitive rate. It has a 0.86 per cent discount until November 30, 2006, giving a current payable rate of 5.34 per cent. There is a £250 cashback and if the mortgage is paid off during the discount period, the cashback is reclaimed.

Some borrowers may feel a bigger discount is more important than a large cashback and these borrowers are likely to go for the Principality mortgage. However, if the borrower is looking for a large cashback, they may be tempted by the Teacher&#39s Building Society mortgage despite its hefty redemption tie-in.

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