It is fixed until 30 April 2008 with no overhanging redemption penalties and a rental income calculation based on 125 per cent of the pay rate of 4.99 per cent.
The maximum loan-to-value is 85 per cent but is 75 per cent for first-time landlords and a 1.5 per cent arrangement fee is added to the loan.
The early repayment charge is 5 per cent until 30 April 2008 with a facility of repaying up to 10 per cent of the mortgage balance annually without charge and the loan-to-value’s and rental calculations are averaged across the entire portfolio.
James Cotton, mortgage specialist at London & Country, said: “It is comfortably the lowest three-year fix on the market and the rental calculation based on 4.99 per cent is certain to appeal.
“But with the rental valuation based on such a low rate brokers must make sure that their clients are able to cover the mortgage payments as well as other costs associated with letting.”
Paul Howard, associate director at The Mortgage Works, said: “This is a highly attractive buy-to-let proposition which will appeal to landlords, especially those seeking to increase their property holdings.
“The three-year fix of 4.99 per cent, with no overhanging redemption penalty, gives the borrower the certainty of a very low interest rate coupled with a rental calculation which should cover most, if not all, property transactions.”
He added: “The fee of 1.5 per cent can be added to the loan, even at 85 per cent loan-to-value. In addition our method of averaging rents and LTVs across a portfolio allows landlords to the use the strength of their entire holding to gear up to the maximum and acquire further investment property.”
