Nationwide offshoot UCB Home Loans has announced the expansion of its range of products with the two-year fixed-rate buy2let mortgage.
The mortgage has an interest rate set at 6.49 per cent for loans of up to 80 per cent of valuation for the first two years.
The mortgage comes with a redemption penalty of six months interest in the first year and five months interest in the second year. It can be used to buy up to two properties.
This product joins an area of the market that has been growing steadily over the past year. According to the Council of Mortgage Lenders the buy-to-let mortgage market is now worth a total of £8.3bn. The latest available 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.
The UCB mortgage is not the most competitive product on the market. According to Moneyfacts the lowest rate two-year buy-to-let fixed-rate loan is from Clydesdale Bank, which has a fixed rate of 5.99 per cent for loans of up to 80 per cent of the value of the property. This has a redemption penalty of 3 per cent for the first year and 2 per cent for the second year and is slightly more flexible in that it can be used to buy up to three properties.