Leeds & Holbeck Building Society is undercutting its rivals with its latest fixed-rate buy-to-let mortgage.
The five-year fixed buy-to-let mortgage has a fixed-rate of 6.24 per cent until November 1, 2006 for loans of up to 75 per cent of valuation.
It can be used to purchase up to three properties, with a minimum property value of £50,000. Properties purchased in London must have a minimum value of £85,000 and properties in the south east must have a minimum value of £70,000.
The mortgage has an arrangement fee of £395 and comes with compulsory buildings and contents insurance. It also has a redemption penalty of six months interest in the first three years and three months interest in the next two years.
According to Business Moneyfacts on September 4, 2001, this is the lowest rate available in the five-year fixed-rate buy-to-let mortgage market. Its nearest competitor is from Cheshire Building Society which has a product with a fixed-rate of 6.35 per cent until August 31, 2006 for loans of up to 80 per cent of value. This can be used to buy up to three properties, comes with compulsory buildings and contents insurance and has an arrangement fee of £295. Redemption penalties start at 5 per cent in the first year, descending by 1 per cent a year to year five.
Breaking the costs of the two mortgages down, based on a £100,000 loan, according to Sovereign Financial Services the Leeds & Holbeck mortgage will cost £666.83 a month and the Cheshire product will cost £673.73. If both are redeemed in the first year, the Leeds & Holbeck mortgage will cost £3,505 in redemption fees and the Cheshire mortgage will cost £5,050.