Ipswich has launched a discount buy-to-let mortgage with a rate of 5.65% and a maximum LTV of 75%.
The product tracks Ips- wich’s SVR with a discount of 1.5% until August 31 2010 with no early repayment charges.
Paul Winter, chief executive of Ipswich, says: “Rises in the Bank of England base rate have dramatically boosted the number of landlords who plan to move to whichever lender off-ers the cheapest products.
“Gone are the days when a buy-to-let lender could rely on landlord inertia. Rental yields in most areas of the UK are tightening, so interest rate savings of as little as 0.1% can make the difference between profit and loss. Even small landlords are conscious of this.”
He adds: “Unlike the home purchase sector, where intense competition means uncompetitive products don’t attract business, the buy-to-let sector features a lot of uninspiring mortgages.” Winter says lenders often think they can get away with more costly buy-to-let products because client loyalty tends to be greater in the sector.
He adds: “However, with rental yields across the country getting tighter, this is no longer the case.”
Jonathan Burridge, managing director at Quantum Mortgage Brokers, says: “This product is keenly priced. But with a maximum LTV of 75%, I would expect it to have limited appeal.
“There are lenders with more generous LTVs and they are more likely to attract attention.”