Best Buy-To-Let Mortgages
Here we take a look at the top mortgages for Buy-To-Lets currently available, and some of the advantages and disadvantages.
Bradford & Bingley are offering a variable rate of 5.34% – that’s a 1.91% discount – for two years. The maximum loan to value is 85% and there is a 2% fee, with a minimum of £599. A borrower can have any number of properties within a total advance of £5m. There is a redemption penalty within the first two years. This is good in that it runs for two years from when you take out the mortgage, which might give you a bit more time than their second offering below. Although the minimum fee is £599, you are unlikely to pay that little, as that would be the fee for a mortgage of only £29,950. So it might look enticing, but it isn’t really.
Bradford & Bingley’s second offering is a fixed rate of 5.24% which runs until 31 July 2009. The maximum loan to value is 85% and there is a 2% fee, with a minimum of £599. A borrower can have any number of properties within a total advance of £5m. There is a redemption penalty to 31 July 2009. This is a good low fixed rate, but with a definite end date which may come round too soon.
Bradford & Bingley have a third offering of a fixed rate of 5.64% which runs until 31 July 2010. The maximum loan to value is 85% and there is a 1.5% fee, with a minimum of £599. A borrower can have any number of properties within a total advance of £5m. There is a redemption penalty to 31 July 2010. This fixed rate is a fairly good rate for three years, coupled with a large £5m advance range.
Nottingham Building Society can do a fixed rate of 5.74% which runs until 1 June 2012. The maximum loan to value is 80% and there is a fee of £695. A borrower can have a maximum of 10 properties within a total advance of £1.5m. There is a redemption penalty to 1 June 2012. This five year fixed rate might look attractive if you see base rates staying around the level they are or going higher. Remember, fixed rates give you the advantage of knowing what your repayments are going to be – in this case, for five years.
Portman Building Society are offering a fixed rate of 4.89% which runs until 30 September 2009. The maximum loan to value is 85% and there is a 0.5% fee, with a minimum of £595. A borrower can have any number of properties. There is a redemption penalty to 30 September 2013. This looks an attractively low rate, but it has a long tie-in period of four years, during which the mortgage rate will revert to the much higher Standard Variable Rate, and if you redeem from that in four years, you’ll get the redemption penalty. Probably one to avoid.
Principality Building Society’s offering is a variable rate of 5.34% which is a 0.16% discount running until 31 July 2009. The maximum loan to value is 85% and there is a fee of £1999. A borrower can have a maximum of 5 properties within a total advance of £500,000. There is a redemption penalty to 31 July 2009. This is reasonably low rate, and comes with that fee of £1999, but compared to Bradford & Bingley’s above, £1999 is 2% of £99,950, so if you’re mortgage is higher than that you’re better of here. The total advance is lower on this one than B&B’s £5m, but £500,000 may be enough for you.
Tom Smith
13th June 2007
