Type: Flexible variable rate buy-to-let mortgage
Variable rate: No more than 2% above SVR for the life of the loan
Payable rate: 5.59%
Minimum loan: 25,001
Maximum loan: Up to 85% of valuation subject to a maximum of 300,000
Income multiples: Rental income must be at least 130% of mortgage repayments
Conditions: Available only for the simultaneous purchase, remortgage or transfer of between two and five properties with an aggregate value of up to 1m, one free mortgage valuation up to 680, discounted legal fees for remortgages if the societys solicitors are used
Flexible features: Overpayments, underpayments, payment holidays of three months a year, interest calculated daily
Arrangement fee: 250 for each property
Redemption fee: None
Introducers fee: Subject to negotiation
Tel: 0845 757 3612
Coventry Building Societys latest buy-to-let mortgage is a flexible variable rate deal which is guaranteed to be no more than 2 per cent above the standard variable rate.
Aptitude Financial Planning principal Roy Rutter feels Coventry has a good reputation and that this product will attract interest from existing buy-to-let investors.
Looking at the strong points o this deal, Rutter says: “This product is targeted at a particular market and within the niche it is competitive on several counts the fixed rate, the flexibility to overpay without penalty, no early redemption charges and help with legal fees. However, I am not sure if the timing is right. Many commentators think that the best of the buy-to-let days are over.”
Switching his attention to the less attractive features of the mortgage Rutter feels its use of the term booking fee rather than arrangement fee is a bit misleading. He says: “Coventry state there is no arrangement fee but there is a booking fee an arrangement fee by another name of 250 per property.
“I suspect Coventrys target audience is the landlord with several properties who is looking to consolidate his borrowings at a competitive rate and under one roof. Setting up costs can be quite high in these cases.”
Considering which products are likely to compete with this mortgage Rutter says: “Bristol & West and The Mortgage Works are two lenders who are in Coventrys market.”
Summing up, Rutter says: “The terms of the Coventry mortgage are generally flexible and keenly priced, but as can often be the case, the devil is in the detail.”
Suitability to market: Average
Competitiveness of mortgage rate: Good
Adviser remuneration: Average