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Capped rate tracker mortgage unveiled

Date: Wed, 17 Nov 04 Analysis

Independent mortgage and financial adviser Charcol is offering an exclusive, five-year capped rate tracker mortgage.

The product is set at Bank of England base rate + 0.64 per cent, giving a current interest rate of 5.39 per cent (6.3 per cent APR) with a cap of 5.89 per cent.

Ray Boulger of Charcol said the product provides the "welcome combination" of a competitive tracker and a competitive cap, making it "not only the market leading five year cap, but also excellent value as an alternative to a five year fixed rate".

"This is one capped rate that really does offer borrowers wanting five years of interest rate protection the best of both worlds," he said.

"The lowest five year fixed rates are currently priced just under five per cent and so it only needs two quarter point reductions in the Bank of England base rate from the current 4.75 per cent to take the pay rate on this mortgage below the lowest fixed rate for the same term.

"Conversely, should base rate rise during the next five years, the maximum increase borrowers will suffer is only 0.5 per cent.

"This mortgage offers the full downside benefit if base rate falls from the current level, with little upside risk if it rises."

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Endsleigh Insurance Services Limited is authorised and regulated by the Financial Services Authority. This can be checked on the FSA Register by visiting its web site at www.fsa.gov.uk/register.
Endsleigh Insurance Services Limited. Company No: 856706 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.