The deal has a £750 completion fee and a £245 application fee, bringing total fees to £995. It is fixed until June 30,2014 and capital repayments above 10 per cent a year during this period will incur a 3 per cent early redemption charge.
Defaqto insight analyst for banking David Black says: “The average two-year fixed rate mortgage charges a fee of £2,357 so Skipton’s new offering at £995 wins on that score. At 70 per cent LTV the average rate charged is 5.20 per cent with a £2,138 fee and again this shows the Skipton in good light.
“Someone needing a two-year fixed-rate remortgage for about £100,000 at 70 per cent LTV would make the Skipton first choice in terms of cost by virtue of its free legal fees and valuation. For house purchases of that amount though, Accord Mortgages has the market leader with its 4.34 per cent rate to 75 per cent LTV and fees of 0.75 per cent plus £195.
“As the size of the mortgage required climbs to around £200,000 and above another Accord product take precedence – its 4.34 per cent deal with a £1,495 fee to 75 per cent LTV
“There’s still a massive premium to pay in terms of the rate and fee mix charged by buy-to-let mortgages compared to equivalent residential mortgages but the gap has narrowed. The additional cost of the average two-year fixed-rate buy-to-let mortgage at 75 per cent LTV over its two-year term compared to its residential counterpart soared from only £641 in August 2007 to a peak of £8,277 in March 2010. But it has since narrowed to £5,186. That premium amply illustrates why the BTL sector is attractive to lenders.”