All three deals are available for loans up to 65 per cent of valuation and have the same flexible features and incentives. They differ only in terms of their fixed rate and arrangement fees, so that the lower the fixed rate, the higher the arrangement fee.
The lowest rate is fixed at 3.75 per cent until March 31, 2014. It has the highest arrangement fee at £2,249 plus £250 booking fee. The other deals are fixed at 3.99 per cent and 4.25 per cent, with arrangement fees of £1,749 and £999 plus £250 booking fee respectively.
Defaqto insight analyst for banking David Black says: “Buy-to-let mortgage rates tend to charge a significant interest rate premium as well as higher arrangement fees than equivalent residential mortgages. The average two-year fixed-rate BTL mortgage for a £150,000 loan currently charges about £5,500 more over its two-year term than its residential mortgage counterpart.
“Arrangement fees that are expressed as a fixed amount, rather than as a percentage of the mortgage, clearly favour bigger loans. To take account of the overall cost-mix of both the interest rate and the fees you really need to calculate the true cost of each mortgage based on the amount that you want to borrow as well as the value of any incentives offered.
“The new Godiva BTL mortgages are among the leading pack for low-ish loan-to-value two-year fixed-rate BTL mortgages. But three alternative two-year fixed-rate BTL mortgages that may be worth considering are Nottingham Building Society’s 3.79 per cent fix at 60 per cent LTV, Accord Mortgages 4.04 per cent fix at 65 per cent and Woolwich’s 3.88 per cent fixed rate at 60 per cent LTV.”