Type: Buy-to-let tracker
Tracker term: Until November 30, 2008
Tracker rate: 0.99% above Bank of England base rate
Payable rate: 5.74%
Minimum loan: £25,005
Maximum loan: Up to 85% of valuation subject to a maximum of £500,000
Income multiples: Based on affordability
Arrangement fee: £799
Redemption fee: None
Introducer’s fee: Refer to lender
Tel: 08457 253253
This deal from The Mortgage Business is a buy-to-let tracker mortgage where the income multiples are based on affordability rather than rental income requirements.
John Charcol product specialist Ash Sharma points out that the latest range of buy-to-let products released by The Mortgage Business include a 2-year tracker at Bank Base Rate plus 0.99 per cent until November 30, 2008, to give a current pay rate of 5.74 per cent. “This product carries no early repayment charges and a £799 arrangement fee. Unlike most of The Mortgage Business products, this is free from a higher loan charge up to 85 per cent, whereas the HLC normally triggers at 75 per cent. There are also flexible features on this product,” he says.
Discussing the potential drawbacks of this deal Sharma says: “The maximum loan size is rather restrictive at only £500,000, whereas most lenders will now go up to £1m at 85 per cent. Probing a little deeper, it becomes obvious why the loan size is only £500,000, as the product is available as a true self cert product.”
Sharma explains that most lenders would require evidence of income, as well as the borrower being able to support their own mortgage and to show that the rental income will cover the mortgage on the rental property. “The Mortgage Business is one of the unique lenders who do not require any proof of income. That is the major unique selling point of The Mortgage Business.”
Although there are cheaper two year trackers on the market, such as Abbey at bank base rate plus 0.19 per cent and Alliance & Leicester’s base plus 0.35 per cent, Sharma says both of these deals are not available via true self cert. “To truly compare this product with another buy to let self cert lender, you would need to look at Platform who have a Base plus 0.6 per cent for three years with a £599 arrangement fee and also Capital Home Loans which has a rate of base plus 0.49 per cent for three years and a 1 per cent arrangement fee.
Suitability to market: Average
Competitiveness of rate: Average
Adviser remuneration: Average