Commonwealth Bank of Australia's UK subsidiary NewWorld is offering a flexible buy to let loan which it says strikes a blow for landlords in the mortgage war.
The aim is to offer landlords a deal on a par with those available to owner-occupiers. NewWorld's loan has an initial interest rate of 4.95 per cent for six months, after which it reverts to the company's variable rate of 6.74 per cent.
NewWorld says landlords can overpay to clear the loan early if they find that rental income exceeds the mortgage, letting and tax costs. It says a £100 a month overpayment on a £100,000 loan under the current Bank of England base rate of 5.75 per cent would cut the length of the loan by over six years and save the borrower £31,000 in interest.
NewWorld head Adrian Cosenza says: “The current mortgage rate war may offer great savings potential to the average homeowner but in the UK right now the fastest growing lending market is buy to let, which is not feeling the ben-efit of the rate war. NewWorld's offer ensures that this market is not overlooked.”