Originally posted by ChimpMaster
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There are other lenders who offer contract rate based lending for buy to let mortgages though and have very good rates including a lender who has an arrangement fee free option up to 75% of the property value which can save a lot of money based upon the fact that in the buy to let mortgage market, arrangement fees tend to be higher than in the residential mortgage market. It's quite common for lenders providing buy to let mortgages to charge a fee based upon a certain percentage of what you are borrowing so the bigger the loan, the higher the fees the lender charges.
Quite often it pays to go for a slightly higher rate with a more friendly arrangement fee as you'll end up better off over the duration of the rate.
For example (using random figures), if you are considering a 2 year fixed rate of 3% with a £5,000 arrangement fee and monthly interest only payments of £1,000 then if there is a 2 year fixed rate of 3.4% with no arrangement fee and payments are £1,100 per month you will save £2,400 over the 2 years but it is costing you a £5,000 arrangement fee to save that £2,400 so you'd be better off going for the higher rate with no fee. That principle applies more often than you'd think when looking at buy to let mortgages so be careful when considering which mortgage to go for. Don't simply be led by the headline rate.
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