The tracker product is available at Bank of England base rate minus 0.01% for three years before reverting to base plus 0.99%.
The deal’s rental assessment is calculated at 100% of the pay rate, giving landlords flexibility. But it has a five-year early repayment charge and an arrangement fee of 1,495.
At its unveiling last week, the product was hyped as having the potential to start a price war as other lenders clamoured to follow this lead. But GMAC-RFC’s competitors have thus far remained immobile.
A spokesman for BM Solutions says: “We’re not surprised GMAC-RFC is trying to challenge BM Solutions’ position as the UK’s number one buy-to-let lender but we don’t think a product with overhanging ERCs will shake up the market much.”
And Alan Cleary, managing director of edeus, says: “If something was going to break the market we would react but let’s put it this way – we’re not following this move.”
Brokers are also unimpressed with the product’s overhanging ERCs.
Jeff Knight, director of marketing at GMAC-RFC, says: “In the mainstream market low rates are compensated for by repayment fees. It’s a trade-off. This product is about meeting landlords’ needs and offering choice.”