UCB Home Loans, the specialist lending arm of Abbey National, is bolstering its range of buy-to-let products with the five-year fixed buy2let mortgage.
UCB has fixed the mortgage rate at 6.89 per cent for the first five years and for loans of up to 80 per cent of the value of the property. The maximum possible loan is £400,000 and the maximum number of properties that can be bought is two.
If the mortgage is redeemed in the first two years then the borrower will be charged six months interest, in the third and fourth years the fee will be five months interest and in the fifth year it will be four months interest. There is also an arrangement fee of £495.
This mortgage joins a steadily growing area of the market. According to the Council of Mortgage Lenders the buy-to-let mortgage market is now worth £8.3bn. The latest figures show that the market grew by 12.5 per cent in the first six months of 2000, with the number of lenders increasing from 30 to 39.
According to Business Moneyfacts on September 18, 2001, Bristol & West offers the lowest rate for a five-year fixed-rate buy-to-let mortgage. This mortgage has a rate of 5.95 per cent until October 31, 2006 for loans of up to 85 per cent of valuation. It can be used to buy up to five properties, with a maximum loan of £500,000 and a redemption penalty of 7 per cent in the first year, 6 per cent in years two and three and 5 per cent in year four and five. However, it is only available for people looking to remortgage.