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Standard fare from GMAC


Buy-to-Let Two Year Fixed Rate

Fixed-rate buy-to-let mortgage

Fixed term:
Until January 1, 2007

Fixed rate:
Up to 85% of valuation &#45 6.19%, up to 75% of valuation &#45 5.79%

Minimum loan:

Maximum loan:
Up to 85% of valuation subject to a maximum of £300,000, up to 75% of valuation subject to a maximum of £400,000, up to 65% of valuation subject to a maximum of £500,000
Income multiples: Rental income must be at least 125 per cent of lender&#39s standard variable rate

Arrangement fee:

Redemption fee:
3% until January 1, 2007

Introducer&#39s fee:
0.5% of original loan

Tel: 0870 4844484

GMAC RFC&#39s buy to let two year fixed rate is available at 6.19 per cent up to 85 per cent of valuation and 5.79 per cent up to 75 per cent of valuation.

Charcol product development manager Elliot Nathan finds it hard to see why anybody would recommend this over others on the market.
Nathan says: “It is hard to find anything positive to say about this product. At 0.5 per cent, the introducer&#39s fee is standard, the rates are uncomptetive and there are no flexible features. It is also very disappointing that it is not flexible in terms of the redemption charges and the rental calculation.”

He also dislikes the fact that the rental income is calculated at the standard variable rate and that there is no penalty free capital repayment facility. He adds: “At £495, the arrangement fee is on the high side, although it is at least a flat fee.”

Looking at products which will provide competition, he suggests BM Solutions, which offers a rate of 5.99 per cent for loans up to 85 per cent of valuation. However, he points out the arrangement fee is slightly higher at £599 but the rental calculation is based on the base rate plus 1.2 per cent, which he feels is better than being calculated at the lender&#39s standard variable rate.

For loans up to 80 per cent of valuation Nathan suggests Charcol&#39s two year mortgage only deal at 5.49 per cent, which offers free valuation and free legal fees. This mortgage offers a penalty free part repayment facility and the rental calculation is based on the pay rate, which Nathan prefers.

Suitability to market: Poor
Competitiveness of mortgage rate: Poor
Adviser remuneration: Average
Flexibility: Poor

Overall 5/10


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