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Short-term fix from ICMG

Insurance Company Mortgage Group (ICMG) has introduced a one-year fixed rate buy-to-let mortgage.

The mortgage is fixed at 3.99 per cent until September 3, 2002 and is available to all borrowers for loans of up to 80 per cent of valuation. Any number of properties can be bought within a total advance of £1m.

There is an extended tie-in, so borrowers who pay the mortgage off before September 3, 2004 must pay an early redemption penalty of six months&#39 interest.

According to Business Moneyfacts on October 2, 2001, this is the most competitive fixed-rate for mortgages of this type and three other lenders — Pink Home Loans, Mortgage Express and The Mortgage Operation — offer virtually identical products.

The Mortgage Express deal has a £325 arrangement fee like the ICMG mortgage, but it has the advantage of offering flexible features and borrowers are tied in for a shorter period. If borrowers pay the mortgage off before September 3, 2003, they must pay six months&#39 interest as an early redemption penalty.

Borrowers can overpay a maximum of double their monthly repayments without incurring this penalty. They can also benefit from the daily calculation of interest, make underpayments, take payment holidays and lump sum withdrawals.

However, some borrowers may be looking for a longer fixed-rate as the Bank of England base rate currently stands at 4.75 per cent and they may feel interest rates are unlikely to fall further.


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