Mortgages  

Accord launches fee-free buy-to-let products

Accord Mortgages has launched a range of fee-free, fixed-rate buy-to-let home purchase and remortgage products at 60 per cent and 75 per cent LTV.

At 60 per cent LTV, two-year fixes are available at 2.59 per cent and 3.44 per cent for five-year fixes.

Meanwhile, the rates applicable to landlords for two-year fixes at 75 per cent LTV is 3.49 per cent and 4.29 per cent over a five-year period.

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All the house purchase mortgages offer £500 cashback on completion, while those remortgaging can choose from either free standard valuation and legal fees, or £300 cashback and free standard valuation.

In addition, a two-year tracker is now available to landlords who are remortgaging fee-free at 2.49 per cent at 60 per cent LTV and 2.74 per cent at 65 per cent LTV.

In mid-August, the intermediary lending subsidiary of Yorkshire Building Society launched a range of fixes with a £195 product fee – available to landlords at 60 per cent LTV and 65 per cent LTV.

This included a three-year fix at 2.84 per cent and a five-year fix at 3.44 per cent on home purchases at 60 per cent LTV.

Provider view

Chris Maggs, national buy-to-let commercial manager at Accord, said: “We are very pleased to launch this range of mortgages, especially at a time when landlords are facing a potential base rate increase. We hope that by reducing upfront costs, landlords can minimise the costs of expanding their portfolio or reduce outgoings by remortgaging, and these competitive rates will help brokers looking for the best deal for their clients.”

Adviser view

Commenting on the two-year fixed product at 60 per cent LTV, Kevin Dunn, senior partner and mortgage adviser at Leicestershire-based Furnley House Financial Planning, said: “It sounds fairly competitive. Accord tends to come out with competitive rates. The challenge sometimes is whether the provider will be able to deliver a quality service in a time-efficient manner. We often use Accord Mortgages, but we would not necessarily use the lender if we were under tight time restraints.

“There has been a high demand for buy-to-let mortgages in recent times. With the economy as it is and given low interest rates, more and more people are looking at property to see if they can generate income in the asset class.

“Many have predicted that interest rates would rise at the very early stages of next year. But with all that has happened in China, and global stock markets having been even more volatile, I think there is likely to be an initial rise in the interest rate of a quarter of one per cent to test the waters.”

Charges

Home purchase and remortgage products are fee-free.

Verdict

Given the volatility of stock markets worldwide and the record low interest rates available in the UK, it is perhaps unsurprising that more and more people are showing interest in property as an investment for income solution.

The suitability of recommending a fee-free product at a higher rate is relative. It may work out to be the best option for clients seeking to secure a low value mortgage over a long period of time.