MortgagesFeb 1 2016

Accord offers landlords flexibility with reversion rate

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Accord offers landlords flexibility with reversion rate

Accord Buy-to-Let has launched a discounted reversion rate to improve affordability for landlords following the fixed rate period of their mortgage.

Those coming to the end of a two or three-year fixed or tracker rate mortgage can now get a new reversion rate of 4.04 per cent until the fifth anniversary of their mortgage – a 1.75 per cent discount from Accord’s standard variable rate (SVR) of 5.79 per cent.

Landlords on the discounted rate will not have to pay any early repayment charges after their initial term and can redeem their mortgage at any time. The discounted reversion rate is available on all Accord Buy-to-Let mortgages from today (1 February).

A borrower with a £160,000 mortgage who reverts to the 1.75 per cent discount will pay £19,278 interest in the three years following their initial two-year fixed rate, compared with £27,792 if they had simply reverted to SVR – a £8,514 saving over the three-year period.

After five years, the mortgage rate will revert to Accord’s SVR, with any landlords opting for one of the lender’s five-year mortgages reverting to the standard SVR at the end of the term.

Chris Maggs, Accord’s buy-to-let commercial manager, said this discounted reversion rate gives landlords breathing space after their initial mortgage term ends, while being on a competitive rate.

He said: “We believe the safety net our discounted reversion rate offers will appeal to brokers trying to find the best fit for clients who are planning for the long-term.”

SimplyBiz Mortgages’ chief executive Martin Reynolds said: “Buy-to-let is currently undergoing so many changes, the majority with a negative connotation that it is really pleasing to see a lender think innovatively in how they can help clients manage their portfolios.”

Bob Riach, principal at Riach Financial Advisers, added that it looks like a good deal, as often clients do not remortgage to another lender when their buy-to-let fixed rate ends, due to the fees involved with the new lenders.

“The client often has to pay valuation, legal fees and a new product fee, unlike normal residential remortgages when valuation and legal fees are normally free.”

peter.walker@ft.com