Mortgage Next has joined forces with Mortgage Express to introduce the buy-to-let five-year fixed mortgage.
The mortgage has a fixed rate of 6.35 per cent for loans of up to 80 per cent of valuation until June 3, 2006. It is available for borrowers who already have their own property but who now want to buy a second home and rent it out.
Buy-to-let five-year has a redemption penalty of six months interest until the end of the fixed rate period. The mortgage can be used to buy any number of properties, as long as the total cost is not more than £1m.
The recent turbulence in the stockmarket has encouraged many investors to look at buying property as a more stable form of investment. A report issued by the Association of Residential Letting Agents shows that demand for properties to rent remained steady in the first half of 2001, with an average empty period, when nobody is renting the property, of 33 days nationally, while in the South East of England this is just 24 days.
According to Moneyfacts the most competitive five-year buy-to-let mortgage is from Bristol & West. This has a fixed rate of 6.19 per cent until June 30, 2006 for loans of up to 75 per cent. The mortgage has redemption penalties of 7 per cent in the first year, 6 per cent in years two and three, and 5 per cent in years four and five. A maximum of five properties can be bought, with a maximum value of £500,000.