The Base Rate tracker has a rate of plus 0.20 per cent, currently 4.70 per cent, and is available to Mortgage Next members and directly authorised (DA) brokers that are part of Mortgage Next’s club, Partners.
The product has no early redemption charge (ERC), a procuration fee of 0.5 per cent for the broker and is available up to 85 per cent loan-to-value (LTV).
Justine Tomlinson, marketing director of Mortgage Next, said: “The buy-to-let market has continued to hold up well and this two-year Base Rate tracker offers one of the lowest rates currently available, with the added benefit
of no early redemption penalties. I have no doubt this deal will be very popular with intermediaries and borrowers.”
Other features of the product include the ability to overpay by 10 per cent per year, a maximum loan of £500,000 and an arrangement fee of 1.5 per cent.
At the end of the two-year period, the rate reverts to Bank Base Rate plus 0.99 per cent for the remainder of the mortgage.
Commenting on the product, Michael Brill, director of Baronworth Investment Services, said: “Everything sounds great, except the 1.5 per cent arrangement fee, which is very high. That is quite a lot of money to pay over two years. It depends on the amount of money you are borrowing but if you shopped around, the rate might be higher but you would save overall.”
The addition of a no ERC clause is a feature that has become increasingly popular on tracker mortgage products, due to the recent uncertainty apparent in the money markets.
Brill added: “It is a good thing to have with the current uncertainty the market is experiencing, but the product is overshadowed overall by the very high arrangement fee attached to it.”
