Accord Mortgages has launched three two-year fixed-rate trackers for buy-to-let landlords with a 25 per cent deposit.
All three mortgages are fixed for two years at 75 per cent LTV, with an interest rate of 2.69 per cent – 2.19 percentage points above the Bank of England base rate – and an £800 product fee.
The intermediary-only lender, part of the Yorkshire Building Society Group, said it has increased its mortgage range to offer more choice to brokers and landlords with a range of incentives.
The house purchase version of the mortgage comes with £500 cashback on completion.
Landlords looking to remortgage can choose between free legal services and free standard valuation or £300 cashback on completion and free standard valuation.
Last month Accord Mortgages unveiled a series of three-year fixed-rate mortgage products at varying loan-to-value levels.
These include three-year fixes at 2.09 per cent with a £845 product fee, at 65 per cent LTV.
At 75 per cent LTV, the lender offered a fixed rate of 2.29 per cent with a £345 product fee, free standard valuation and £250 cashback on completion.
In addition, three-year fixes are also available to those with a 20 per cent deposit, at 2.54 per cent – also with an £845 product fee, free standard valuation and £250 cashback on completion.
Provider view
Accord commercial manager Chris Maggs said: “We are sure the launch of these tracker mortgages will be welcomed by brokers and landlords alike. With the base rate at historic lows, many landlords are keen to take advantage of this and purchase their property with a tracker mortgage, while those looking for a new deal will hopefully see value for money from the remortgage options, which include some great incentives.”
Adviser view
Nicki Sparks, mortgage adviser at Surrey-based HFS Milbourne Financial Services, said: “I would say that the loan is very competitive at 75 per cent LTV, especially with the low product fee.
“What the variable rate would be after the two-year period would be a key consideration.”
“I think that people are still attracted to longer-term fixes because base rates have remained at a record low for a long time now, with many predicting that it will rise at some point in the near future. People will want to secure the best deals while rates are still low.
“Buy-to-let borrowers often look for short-term deals because longer-term deals are simply too expensive.”
Charges
£800 product fee for three-year tracker loans.
Verdict
The reduction of rates and the launch of competitive products appear to be popular motifs within the mortgage market at present. With interest rates predicted to rise within the next year or so, many lenders have focused their attention on making their fixes that extra bit more attractive in a bid to lure new custom.
Two-year mortgages are perhaps most ideal for buy-to-let lenders, especially those with a handful of properties in their portfolios, as their attitude to their investment might alter during this period.
It is hard to say whether trackers represent a better deal compared with fixed-rate loans. Trackers often have lower rates, but customers looking to buy one will need to consider whether they would be able to afford a potential rise in interest rates during their loan term.
