Mortgage Next is teaming up with the Bristol & West to introduce the buy to let three-year fixed fee saver.
Brought in for people who are looking to buy a property and then rent it out, the mortgage has a fixed rate of 6.86 per cent for the first three years of the mortgage for loans of up to 85 per cent of valuation. After the fixed rate period the mortgage will revert to 1.75 per cent above the Bank of England base rate.
The mortgage has a £399 completion fee and redemption penalties of five per cent of the advance during the fixed rate period.
The past few years have seen a steady increase in the buy to let market. According to the March 2001 buy to let report from the Association of Residential Letting Agents the average buy to let loan has gone from £60,000 in January 2000 to £102,000 in February 2001.
According to Moneyfacts the Mortgage Next product is not the most competitive on the market on May 8, 2001. Bank of Ireland Mortgages offers a three-year buy to let mortgage with a fixed rate of 5.99 per cent for the first three years of the loan. After this it will revert to 1.75 per cent above the Bank of England base rate. It too has redemption penalties of five per cent of the advance, but unlike the Mortgage Next product does not have a completion fee.