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Product Matters

Northern Rock has introduced a new range of

buy-to-let mortgages. It offers a choice of fixed-rate products and a variable-rate mortgage offering cashback of 2 or 3 per cent, which is unique to the market.

Landlords who choose to borrow on Northern Rock&#39s standard variable rate, currently 6.75 per cent, get 3 per cent cashback on up to 50 per cent loan to value and 2 per cent cashback between 50 and 75 per cent LTV.

There is the added flexibility of capital repayments of up to 15 per cent of the original balance each year for no extra charge.

However, in the first six years there is a substantial tapering redemption penalty of 3 per cent down to 1 per cent on the 3 per cent cashback loan and 2 per cent down to 1 per cent on the 2 per cent cashback loan, which ties down the customer for a lengthy period.

Other products in Northern Rock&#39s buy-to-let range include fixed rates for periods of two, three or five years. A fixed rate of 6.74 per cent is payable up to 50 per cent LTV and 6.99 per cent is payable up to 75 per cent LTV. There is a 2 per cent redemption penalty during the fixed period, which is standard within the market.

There are also two-year fixed-rate specials at 3.74 per cent up to 50 per cent LTV and 3.99 per cent up to 75 per cent LTV, again with the option of capital repayment of up to 15 per cent a year. There is a considerable tapering redemption penalty of 4/7/5/4/2/1 per cent to be repaid in the first six years.

The cashback offer on Northern Rock&#39s buy-to-let mortgages is certainly worth a look.

Pam Mann is operations manager at The Pretty Technical Partnership

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