Pink Home Loans two-year fixed rate buy-to-let mortgage is aimed at more modest buy-to-let investors.
The mortgage can only be used to buy just one property and not several, as many other competing products allow. It has a fixed rate of 5.8 per cent until January 31, 2004 for loans of up to 80 per cent of the value of the property. The mortgage is funded by Britannic Money. After the fixed rate period the mortgage will revert to 1.5 per cent above the London interbank offered rate.
The most that can be borrowed is £500,000, while any first-time buyers must have a minimum income of £20,000. It is also available to expatriates, but with a more limited loan to value limit of 70 per cent. The mortgage has redemption penalties of 3 per cent of the advance in the first year and 2 per cent in the second year.
Looking at the other two-year buy-to-let mortgages available on the market, the fact that the Pink product is limited to just one property is unusual. No other lenders offer a one-property mortgage, although UCB Home Loans and Royal Bank of Scotland offer two-property mortgages.
According to Business Moneyfacts on October 30, 2001, the most competitive two-year fixed rate buy-to-let mortgage is from The Woolwich. This has a rate fixed at 5.65 per cent until February 1, 2004 for loans of up to 75 per cent of the value of the property. It can be used to buy any number of properties to a maximum total value of £5m and has a redemption penalty of six months interest during the fixed rate period.