Mortgages for Business is offering a 4.69% five year fixed rate buy-to-let mortgage.
This product features a 4.69% five year fixed rate that reverts to Bank of England Base Rate (currently 4.50%, variable) + 1.75%.
Overall cost for comparison of 5.9% APR, and early repayment charges apply if the mortgage is partly or fully repaid in the first five years.
The product is available for new purchases and remortgaging, and there is a lender arrangement fee of 1.5%. Maximum LTV is 85%, and the product incurs a typical broker fee of 250.
Mortgages for Business is also offering a 4.55% three year fixed rate buy-to-let mortgage.
This product features a 4.55% three year fixed rate that reverts to LIBOR (currently 4.59%, variable) + 1.75%.
Overall cost for comparison of 6.2% APR, and early repayment charges apply if all or part of the mortgage is repaid in the first three years.
The product is available for new purchases and remortgaging, and there is a lender arrangement fee of 1.5%.
Maximum LTV is 85%, and the product incurs a typical broker fee of 250.
Jonathan Moore, marketing manager for Mortgages for Business, says: “We are surprised these products are still available in the marketplace given current swap rates (the base on which fixed rates are priced), three year swap was 4.63% and five year swap rate was 4.69%, correct as of October 17 2005.
“This means the five year product is priced at no margin above the swap rate and the three year product is priced at below swap rate.
“Residential markets often see sub margin pricing, but in the buy-to-let market it is extremely rare, we would therefore advise investors to act quickly to take advantage of these rates.
“Swap rates have continued to rise, in recent weeks three year swap was 4.51% last week and five year swap was 4.54%, we would therefore predict that lenders will withdraw these products from the market imminently.
“These outstanding headline rates follow a general trend in the buy-to-let market in the last six months with lenders offering investors a great headline rate with a large up to 1.5%, mortgage arrangement fee. Lenders have offset highly competitive rates with fees, demonstrating that buy-to-let mortgages are becoming increasingly sophisticated.
“The large fee in our experience does put some investors off, if consider 100,000 loan you do need to pay 1,500 as an arrangement fee. However lenders will allow you to add this to the overall loan amount and it can be repaid over the mortgage term.
“We would therefore urge investors to do their sums and take a view in consideration of the headline rate and arrangement fee, and not to be put off by the arrangement fee. In the long run including the fees we still think these products represent excellent pricing.”