Pink Home Loans has introduced the three-year fixed rate buy-to-let mortgage.
The mortgage has a fixed rate of 5.98 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 1.98 per cent above the Bank of England base rate for its remaining term. Any number of properties can be bought using the mortgage, with the maximum loan amount being £500,000. The mortgage also has a redemption penalty of 5 per cent of the advance during the fixed rate period.
An increasing number of companies are providing standard variable rates based on a set percentage above the Bank of England base rate. One reason for this has been increasing demand from consumers wishing to see their mortgages benefit at once from cuts in the Bank of England base rate.
According to Business Moneyfacts on June 7, 2001, this is the most competitive three-year fixed rate mortgage available. The next most competitive offering based on an initial fixed rate is from the Bristol & West. This has a fixed rate of 6.09 per cent until June 30, 2004, for loans up to 75 per cent of valuation. Under this scheme a maximum of five properties can be purchased, with the same maximum loan of £500,000. But the Bristol & West mortgage will revert to 1.75 per cent above the Bank of England base rate level, making it slightly more competitive after the fixed rate period.