The mortgage is priced at 2.95 per cent with no reservation and completion free, and comes with free standard valuation and free legal costs.
The loan will be available through The Business Mortgage Company (TMBC) and a selected group of brokers on the distribution panel of Legal & General, with whom Newcastle Intermediaries launched in March.
A standard variable rate, which is currently 5.99 per cent, is applicable once the fixed-rate period reaches its end.
The product also comes with free standard valuation on properties up to and including £500,000, and free legal transfer when the Society’s nominated solicitor is used. The minimum loan value is £50,000 and the maximum is £350,000. A 3 per cent early repayment charge is applicable until 31 August 2018.
Last month, the building society launched two five-year fixes to its panel of mortgage brokers at up to 80 per cent LTV.
The first product is priced at 2.6 per cent and comes with a £199 reservation fee and £800 completion fee, while the second product is fixed at 2.69 per cent with no product fees.
Provider view
Steve Carruthers, head of mortgage distribution at Newcastle Intermediaries, said: “We continue to see increased interest in our buy-to-let proposition and this competitive product will offer a great option for re-mortgaging landlords who are looking to avoid high product fees.”
Adviser view
Tom Oliver, IFA at Newcastle-based Lamb and Associates, said: “That is a really good deal for a buy-to-let loan – I am really impressed. I have The Business Mortgage Company available to me, so I will be able to access this deal. The loan is likely to appeal to buy-to-let borrowers who already have mortgage products because of the absence of product fees.
“Making the product available to only a handful of distributors ensures quality. The Business Mortgage Company in particular is quite good at ensuring their customers match up to mortgage lending criteria. They would essentially do the dirty work, which gives the lender less work to do.”
Mr Oliver added: “I do not deal with a lot of buy-to-let. I have not personally seen a reduction in buy-to-let applications, but other advisers claim there is. I would imagine the lender is keen to get as much of the market share as possible in a shrinking marketplace.
Charges
No reservation and completion fees.
Verdict
The mortgage marketplace has been rocked by the recent hike in stamp duty on buy-to-let properties. Providers have responded by unveiling new and/or discounting existing products to compensate for a predicted slowdown in the market. Whether this will be enough to entice aspiring landlords, or win over those who have become disillusioned with the legislative change, remains to be seen.
Here, the product is certainly competitive, and likely to appeal to landlords approaching the end of their existing fixed-rate terms. These borrowers, who have typically spent a pretty penny on the maintenance of their existing properties, as well as on their initial loan, would particularly welcome the absence of reservation and completion fees.
From the lender’s point of view, limiting distribution channels is a boon when it comes to distribution costs, but also goes some way in forming greater ties with the select few.
