Exclusive Connections is helping to create more landlords with the introduction of the exclusive buy-to-let discounted rate mortgage.
The mortgage is aimed at people who are looking to purchase a second property and then rent it out to provide them with an income. It has a discount of 1.25 per cent from the standard variable rate, which is 1.75 per cent above the Bank of England base rate for the first two years of the loan. This gives the mortgage a payable rate of 5.75 per cent for loans up to 80 per cent of valuation. After this the rate reverts to 1.75 per cent above the Bank of England base rate.
The mortgage also has redemption penalties of six months interest for the first three years of the loan, with the maximum loan amount being £1m. There is no limit to the number of properties.
The buy-to-let market has become increasing popular over the past few years. One reason has been that the increase in property prices has made many people see property as being a good long-term investment. Another reason has been the fall in interest rates, while the combination of these two reasons has also encouraged more lenders, such as Birmingham Midshires and New World mortgages to get involved in the market.
According to Moneyfacts the Exclusive Connections mortgage is not the most competitive two-year discount buy-to-let mortgage on the market on June 1, 2001. This is the two-year discount from Pink Home Loans, which has a discount of 1.4 per cent for the first two years, giving it a payable rate of 5.35 per cent. This then reverts to 1.5 per cent above the Bank of England base rate. But, it has a lower maximum loan to value of 75 per cent. It has the same early redemption penalties of six months interest for the first three years and the same maximum loan limit of £1m for an unlimited number of properties.