Mortgages and loans provider John Charcol has announced a new two-year tracker loan with an interest rate currently equivalent to 3.99 per cent.

The loan tracks the Bank of England base rate at 0.51 per cent below for two years before reverting to 1.99 per cent above after this initial period. At current rates this is equal to 6.49 per cent.

Ray Boulger, senior technical manager at John Charcol, comments: “This is the undisputed market-leading two year tracker for anyone wanting to borrow £200,000 or more.”

Mr Boulger notes that “the number of people in this category is increasing by the day” but warned of the downside to the low rate on offer.

“The trade off for the very low pay rate is a relatively high arrangement fee of £1,499, which is why this mortgage is only suitable for larger loans.

“The larger the loan the more value this mortgage delivers and there is no limit to the maximum loan size.”

The upper limit of the loan to value level is 90 per cent, making the product an attractive proposition for a number of prospective borrowers.

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