Pink Home Loans has designed a three-year fixed rate buy-to-let mortgage for loans of up to 85 per cent of valuation.
The mortgage is available to all borrowers and is fixed at 5.98 per cent for the first three years. Borrowers who pay off the mortgage must pay 5 per cent of the amount repaid for four years, which amounts to an extended tie-in of one year.
According to Moneyfacts on September 18, 2001, it is possible to get a three-year fixed-rate buy-to-let mortgage from Bristol & West IMC, which does not have an extended tie-in and also has a slightly lower fixed rate.
The Bristol & West mortgage is fixed at 5.95 per cent until October 31, 2004 and is available for loans of up to 85 per cent of valuation. Although it has a total maximum advance of £500,000 like the Pink Home Loans mortgage, it limits borrowers to five properties. The maximum loan for a single property is £250,000.
Borrowers who pay off the Bristol & West mortgage during the fixed-rate period must pay 5 per cent of the amount repaid. This is the same as the Pink Home Loans mortgage but it differs in that borrowers are not tied in for an extra year.
Some borrowers may choose the Bristol & West product over the Pink Home Loans mortgage because of the competitive fixed rate and the lack of an extended tie-in. However, borrowers who want more than five properties in their portfolios or who want to buy a property over £250,000 may prefer the Pink Home Loans deal.