3.49% 1 year fixed BTL mortgage

[knowley]

Hi all,

Does anyone have any opinion on the 3.49% one year fixed Buy to Let mortgage being offered by The Mortgage Works? I've not heard of these people before...

http://www.themortgageworks.co.uk/content/products/buy-to-let-mortgages.aspx

Thanks

[dmc]

I've not done the figures but the arrangemnet fee seems expensive (as does the ERC) - depends on the situation. Are you using a broker at all?

Early Repayment Charge: 5% of capital repaid until 31.03.2010
Max LTV: 70%
Arrangement Fee: 3.50% of loan (minimum £595)‡

TMW are a very established lender.

[knowley]

Yes the arrangement fee is a bit steep!

I guess I need to work out whether 1% less interest a month for one year with 3.5% arrangement fee is cheaper than going with say C&G at 4.89% with a 2.5% fee!

My situation is its a property currently let and owned outright (no mortgage), we want a BTL mortgage to repay my personal mortgage as the fixed period comes to an end and because at the moment we are losing out on some tax relief!

When you say a broker do you mean a mortgage broker? No -wasn't planning on it... why?

[Poppy]

Suggest that you project costs and payments for two or three years with the one year fixed rate and the variable rate thereafter with a few mortgage lenders. You'll have a clearer picture then.

I also suggest that you employ the services of a whole of market mortgage broker.

[yoda01]

Hi all.
got this email from http://www.landlordsfinance.co.uk/rates.html
________________________________________________

Dear Client,

Please find below an update on the latest news stories concerning Buy to Let property investment.

Mortgage News

The Mortgage Works have withdrawn their entire mortgage range today. Perhaps a reaction to similar weekend activity from other lenders, see below. They will replace the range at some stage this week but have announced that they will no longer deal with limited companies so the new range will be somewhat reduced. Further proof that we are losing diversity and choice amongst the lenders that actually remain in business.

BM Solutions withdrew their entire Buy to Let range over the weekend and now only have one product for new business at 75% LTV – a 5 year fixed rate product!

At the same time Cheltenham & Gloucester have streamlined their product range and only have 3 year Buy to Let deals – further signs that the two businesses are merging under the Lloyds Banking Group umbrella.

It does seem, however, that the aim is to promote the C&G brand more. C&G rates have improved and 75% is still available on wider range of products although we are yet to see if their application process will be more streamlined.

For an up to date look at available Buy to Let products please visit our Table of Rates

Best Buys

5.29% Fixed until 30/06/2012 – up to 75% LTV – free legals and valuation for remortgages
5.69% Fixed until 01/04/2014 – up to 75% LTV – the only available long term, mainstream Buy to Let fixed rate up to 75%
Call Mike or Simon on 0845 140 40 50 to discuss all available products.

[knowley]

I also suggest that you employ the services of a whole of market mortgage broker

Does anyone have any experiance of:
http://www.thebuytoletbusiness.com/BuyToLetRates/

Or can does anyone know a good broker to recommend to me?

[knowley]

Been offered a 65% LTV product that tracks base rate @ +3.49% and is capped at 5.49% for 3 years. With a £2000 arranagement fee and free valuation & free legal...

Sounds like a good deal to me! What do you guys n gals think?

I don't need the mortgage for a few months but getting this product before its withdrawn tomorrow gives me 6 months?!

[jeffrey]

The arrangement fee sounds dangerously large.

[knowley]

Works out to about 2.6% of the loan I am looking to arrange.

I've also looked at 3yr fixeds that are 5ish% and their arrangment fees are normally around 2.5%. Seems to be the going rate :confused:

[skjchance]

I am an IFA and finding The Mortgage Works (UK) plc to be one of the main players in the Buy to Let market at the moment. They are a specialist subsidiary of Nationwide offering BTL and Self Cert mortgages.

When looking at the mortgage you need to decide what is most important to you. Do you want the lowest possible mortgage rate OR the chapest overall deal OR the lowest upfront costs? Also, how long or short do you want a fixed rate to run and are you comfortable with remortgaging at the end of that time?

The majority of BTL mortgages at the moment have arrangement fees of 2% upwards. It is worth seeing a qualified IFA/Mortgage Adviser who specialises in buy to let who can talk you through your options and find the best deal for you.

[JohnS ResidentBroker]

The Mortgage Works were one of the first lenders to use this ploy of low rates and high arrangement fees and because people are very rate sensitive they seemed to get away with it!

They come to the top of the best buy tables as the rate is low and therefore get a lot of business BUT the only way to compare it is look at total costs e.g. rate paid, arranagement fee valuation fee , legal fee.
Generally though unless you only want the mortgage for one year and then your looking to sell 1 year deals are quite poor - as setup costs are very high.

cheers
John

[knowley]

In the end I spoke to two brokers and both recommend the same product, so Govida must have withdrawn it like I was told they would.

Providing the rates stay low over the 3 years I should be quids in having paid £2000 fees instead of being fixed at 5.49% with low/no fees. Its a gamble being on a tracker at BR+3.49 but it is a capped product so I won't end up losing out too much should interest rates shoot up.

[kavi]

Suggest that you project costs and payments for two or three years with the one year fixed rate and the variable rate thereafter with a few mortgage lenders. You'll have a clearer picture then.
The majority of BTL mortgages at the moment have arrangement fees of 2% upwards. It is worth seeing a qualified IFA/Mortgage Adviser who specialises in buy to let who can talk you through your options and find the best deal for you.