Interest Only with Auto deduct 20 Year Term Prime less 1% for 3 Years.

This disclosure contains important information about our Home Equity Line of Credit. You should read it carefully and keep a copy for your records.

In this disclosure statement, the words "we", "us", or the "Bank" refers to East Cambridge Savings Bank and "you" refers to the Borrower.

Availability of Terms:  All of the terms described below are subject to change.  If these terms change (other than the ANNUAL PERCENTAGE RATE) and you decide, as a result of the change, not to enter into an agreement with us, you are entitled to a refund of any fees you paid to us or anyone else in connection with your application.

 Security Interest:  We will take a mortgage on your home.  You could lose your home if you do not meet the obligations in your agreement with us.

Possible Action: We can terminate your line, require you to pay us the entire outstanding balance plus interest in one payment and charge you certain fees if:

1. You engage in fraud or material misrepresentation in connection with the line.
2. You do not meet the repayment terms.
3. Your action or inaction adversely affects the collateral or our rights in the collateral.

We can refuse to make additional extensions of credit or reduce your credit limit if:

1. The value of the dwelling securing the line declines significantly below its appraised value for the purposes of the line.
2. We reasonably believe you will not be able to meet the repayment requirements due to a material change in your financial condition.
3. You are in default of a material obligation in the agreement.
4. Government action prevents us from imposing the ANNUAL PERCENTAGE RATE provided for or impairs our security interest such that the value of the interest is less than 120% of the credit line.
5. A regulatory agency has notified us that continued advances would constitute an unsafe and unsound practice.
6. The maximum ANNUAL PERCENTAGE RATE is reached.

The initial agreement permits us to make changes to the terms of the agreement at specified times or upon the occurrence of specified events.

Minimum Payment Requirements:  You can obtain advances of credit for 10 years (the “Draw Period”). During the Draw Period, payments will be due monthly.  Your minimum monthly payment will equal finance charges that have accrued on the outstanding balance.  After the Draw Period ends, you will no longer be able to obtain credit advances and must pay the outstanding balance over 10 years (the “Repayment Period”).  During the Repayment Period, payments will be due monthly.  Your minimum monthly payment will equal 1/120^th of the balance that was outstanding at the end of the Draw Period plus the finance charges that have accrued on the outstanding balance.

Minimum Payment Examples: If you made only the minimum monthly payments and took no other credit advances, it would take 20 years to pay off a credit advance of $10,000 at an ANNUAL PERCENTAGE RATE of 7.250% for the first 36 months and an ANNUAL PERCENTAGE RATE of 7.75% thereafter. During that period, you would make 120 monthly interest-only payments (the “Draw Period”) varying between $65.75 (payment 1) and $65.75 (payment 120) followed by 120 monthly payments (the “Repayment Period”) varying between $149.08 (payment 121) and $89.70 (payment 240).

Fees and Charges: To open and maintain a line of credit, you must pay the following fees to us:

Application Fee:                  None

Points:                               None

Annual Servicing/Processing Fee:  $50.00 (due on each anniversary of line)

You must also pay certain fees to third parties to open a line.  These fees generally total between $500.00 and $1,000.00 (“Closing Costs”).  If you ask, we will give you an itemization of the fees you will have to pay to third parties.

In addition, you must maintain homeowner’s insurance on your property equal to at least the total of your first mortgage plus your maximum line of credit.  As is required by Massachusetts law, the Bank will accept insurance less than this total, provided coverage is 100% Replacement Cost Insurance.  This insurance is not available through the Bank and may be obtained through any agency acceptable to the Bank.

Prepayment Penalty:  A prepayment penalty equal to the amount of the East Cambridge Savings Bank paid “closing costs” will be due if the line is paid off within two (2) years of the Note Date.

Tax Deductibility: You should consult a tax advisor regarding the deductibility of interest and charges for the line.

Variable Rate Information:  The Initial ANNUAL PERCENTAGE RATE is not based on the index and margin used to make later interest rate adjustments. If the subject monthly payment is automatically deducted from an East Cambridge Savings Bank checking/savings account, the Initial Interest Rate will be calculated monthly using the formula of The Wall Street Journal Prime Rate minus one percent (1.00%) during the first 36 months.  Subsequent Interest Rates will be calculated monthly using the formula of The Wall Street Journal Prime Rate minus one-half of one percent (0.5%) for the remainder of the term.  If the subject monthly payment is not automatically deducted from an East Cambridge Savings Bank checking/savings account, the rate will be The Wall Street Journal Prime Rate plus zero percent (0.00%) for the life of the loan.

The ANNUAL PERCENTAGE RATE (corresponding to the periodic rate) and the minimum payment can change as a result.

The ANNUAL PERCENTAGE RATE includes only interest and not other costs.

The ANNUAL PERCENTAGE RATE is based on the value of an index.  The index is the Prime Rate as published in The Wall Street Journal under the heading “Money Rates” on the first Bank business day following the 24^th of each month, effective immediately.  To determine the ANNUAL PERCENTAGE RATE that will apply to your loan, we add a margin to the value of the index.

Ask us for the current index value, margin and ANNUAL PERCENTAGE RATE.  After you open a credit line, rate information will be provided on periodic statements that we will send you.

Rate Changes:  The ANNUAL PERCENTAGE RATE can change each month.  The Maximum ANNUAL PERCENTAGE RATE (cap) that can apply is 18%.  Except for this “cap”, there is no limit on the amount by which the rate can change during any one-year period.

Maximum Rate and Payment Examples:  If you had an outstanding balance of $10,000 during the Draw Period, the minimum monthly interest only-payment at the maximum ANNUAL PERCENTAGE RATE of 18% would be $147.95. This ANNUAL PERCENTAGE RATE could be reached during the first month of the Draw Period.

If you had an outstanding balance of $10,000 at the beginning of the Repayment Period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE of 18% would be $231.28.  This ANNUAL PERCENTAGE RATE could be reached during the first month of the Repayment Period.

*This is a margin we have used recently, your margin may be different.

I/We hereby acknowledge reading and receiving a complete copy of this disclosure.