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Scottish BS stays local

Scottish Building Society has designed a flexible buy-to let mortgage for borrowers to buy properties only in Scotland.

The mortgage is available for loans of up to 80 per cent of valuation and up to 3 properties can be purchased within a total advance of £250,000. The maximum loan for each property is £100,000.

The mortgage has a 1 per cent discount in the first year, giving a current payable rate of 5.50 per cent. Borrowers can make underpayments and take payment holidays if they have first made overpayments, but interest is calculated on a monthly basis rather than daily. There is no facility for lump sum withdrawals, but on a positive not there is no redemption penalty.

House prices are lower in Scotland than in England & Wales, so a maximum loan of £100,000 for each property is likely to meet most borrower&#39s needs. According to the Registers of Scotland, which collects information on property prices, the average price of a house in Scotland is currently £50,048. The average in England & Wales is £117,398.

According to Moneyfacts on September 7, 2001, Britannic Money has a similar mortgage without a redemption penalty that is available to borrowers in Scotland, although not exclusively like the Scottish Building Society mortgage. It has a 1 per cent discount in the first year, giving a current payable rate of 5.33 per cent. An unlimited number of properties can be bought within a total advance of £1m, which could be more useful than the Scottish Building Society deal for borrowers who want to build large property portfolios.

Britannic Money allows lump sum withdrawals in addition to the features offered by Scottish Building Society and interest is calculated daily. It also has a current account facility, which takes flexibility on to another level, but some borrowers may be confused by this.

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