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Mortgage Business designs flexible buy to let

The Mortgage Business has designed a flexible buy-to-let mortgage that allows borrowers to buy up to ten properties.

Investment Portfolio has a maximum loan to valuation of 85 per cent and tracks the Bank of England base rate for the mortgage term.

Flexibility is ensured by the ability to make overpayments, underpayments, payment holidays and lump sum withdrawals.

The mortgage is, on the whole, an attractive product. A maximum loan to valuation of 85 per cent is the highest on the market and a maximum of ten properties is good compared to some mortgages. But the interest rate of two per cent above the base rate gives a current payable rate of eight per cent, is high, and borrowers could be paying extra for additional features that they may not use.

If a lower interest rate is more important, borrowers could choose another product. According to Moneyfacts on November 17, 2000, Exclusive Connections had a flexible buy-to-let tracker mortgage with a payable rate of 7.15 per cent until December 3, 2005. After this period it reverts to 1.75 per cent above the Bank of England base rate for the term of the mortgage.

However, it has an early redemption penalty of six months interest in the first five years. The Mortgage Business product is slightly more flexible as it allows lump sum withdrawals and Exclusive Connections does not.


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