John Charcol launches lifetime tracker buy-to-let mortgages

John Charcol has exclusively launched a brace of market leading Buy-to-Let (BTL) lifetime trackers:

a purchase only mortgage available up to 90% Loan To Value (LTV) with rental cover of only 100% required and no Early Repayment Charge (ERC) at any time.

A mortgage available for both purchases and remortgages with a maximum LTV of 85% at Bank Rate + 0.39%.

Ray Boulger, Senior Technical Manager at leading mortgage broker John Charcol says, “Many Buy-to-Let investors’ principal objective is to maximise their medium to long term capital gain, or overall return, rather than generate surplus income. Such investors are keen to gear up as much as possible, even if it means using funds other than the rent to support the mortgage and other outgoings. However, in many cases the gross rental yield on their BTL property(ies) seriously restricts the choice of mortgages. Therefore, these two mortgages have been designed with rental cover requirements that are not too onerous.”

The cheaper rate is available up to 85% LTV and is the lowest lifetime tracker BTL rate on the market with a flat rate fee. The rate is Bank Rate + 0.39%, i.e. currently 5.64%, and the fee £999. An Early Repayment Charge (ERC) applies for the first three years, although up to 10% p.a. can be repaid ERC free. The rental cover required is 125%, calculated at a notional rate of 5%, and on remortgages there is a free valuation and free legals.

The 90% LTV product is available at a lifetime rate of Bank Rate + 0.74% and this deal has no ERCs at any time. The arrangement fee is 0.5% for investors who can meet a rental cover requirement of 115%, calculated at the pay rate, currently 5.99%, but the same rate is also available with a fee of 1% with a lower rental cover requirement of only 100%, also calculated at the pay rate.

Boulger continues, “To obtain the maximum LTVs available on these deals investors will need a gross rental yield of 5.31% for 85% LTV on the first deal and 5.39% for 90% on the second deal. With lifetime rates and rental cover requirements this good there is little point in opting for a three or five year tracker or discount deal. For most BTL investors’ the choice for the best value mortgage tracker is now primarily between taking out a cheaper two year tracker, with a view to continuing to take up a new deal every two years, or securing the convenience of a lifetime tracker at a slighter higher rate.”