C&G offer undercuts the basic rates

THE VARIABLE rate of 9.75 per cent from Cheltenham & Gloucester Building Society beats the standard 9.95 and 9.99 per cent basic rates, and there is a 1 per cent one-year reduction for new borrowers with at least 20 per cent as a deposit, writes Vivien Goldsmith.

National Counties has a 2 per cent discount for one year for all new borrowers, which brings the initial rate down to 7.99 per cent. The discount is cut to 1.75 per cent if buyers take only buildings insurance through the society, and not payment protection cover.

There is a pounds 100 reservation fee, which will be refunded if the mortgage goes through by the end of the year.

First-time buyers can find good deals in the national high street societies. The discounts are complicated but, for instance, a buyer borrowing pounds 50,000 as a 95 per cent loan would get a 1.25 per cent discount until the end of January 1994 and pay 8.7 per cent at the outset with Abbey National or Halifax.

Larger discounts are available for first-time buyers borrowing more than pounds 60,000 or having larger percentage deposits.

Fixed-rate mortgages are coming low enough to tempt even those who believe that rates should be falling further.

The broker Chase de Vere has a two-year fixed rate at 8.2 per cent with a pounds 100 fee and no compulsory insurance.

Woolwich Building Society has a five-year fixed-rate pension or endowment mortgage at 8.99 per cent. There is a pounds 275 application fee and a redemption penalty of three months' interest.

National Westminster Bank has a new range of fixed rates - 8.99 per cent for two years with a pounds 195 fee, 9.49 per cent for five years with a pounds 230 fee and 9.99 per cent for 10 years with a pounds 250 fee.