Sun Bank has added a five year fixed rate mortgage to its range of buy to let mortgages.
The rate is 6.99 per cent until fixed June 1, 2006 and it is available for loans of up to 80 per cent of valuation. Borrowers can buy any number of properties providing the total advance does not exceed £1m, but the valuation of each property must be no more than £500,000. If borrowers pay the mortgage off in the first five years, they must pay five per cent of the advance as an early redemption penalty.
According to Moneyfacts on April 18, 2001, the Royal Bank of Scotland has a five year fixed rate buy to let mortgage that has a lower interest rate of 6.19 per cent until July 1, 2006.
Like the Sun Bank mortgage, it is available for loans of up to 80 per cent of valuation but it compares unfavourably in that a maximum of two properties can be bought within the same maximum advance of £1m.
Borrowers who redeem in the first five years under the Royal Bank of Scotland mortgage must pay a redemption penalty, which is more competitive than the Sun Bank mortgage. It decreases by one per cent each year from five per cent of the advance in year one to one per cent in year five.