I don't know what you mean by the redirect, mojoPortal does not redirect. The only default document should be default.aspx, all other should be removed and I would even delete the file index.html
When you define a folder based site you specify the folder in site settings for the child site but the master site has no folder mapping so any requests that don't already have the folder as part of the url are handled by the master site.
What you need to do in IIS is delete the application below default web site at /mastersite (this won't delete the files it will just delete the application from IIS)
Then click directly on the default web site in IIS and then on the right side of the screen click "Basic Settings", then for the physical path browse to inetpub\wwwroot\mastersite (assuming that is the folder where the mojoportal files exist, ie the mojoportal web.config file should be in that folder.
Then you will be able to access the master site at http://localhost/
Hope that helps,
Joe