Santander testing market with 1-year fix buy-to-let rate

Santander for Intermediaries has taken the unusual step of launching a 1-year fix buy-to-let remortgage rate.

Very few lenders offer fixed rates below two years, but the bank has added the short-term deal to find out if there is a market for this type of product. It was introduced after brokers suggested the buy-to-let mortgage would be beneficial to some borrowers.

Santander's 2.25% mortgage is fixed until 02 May 2020. At the end of this period, it reverts to the lender's variable rate currently of 4%. The overall cost for comparison is 3.89% APRC representative.

There is no arrangement fee and applicants will need a 25% deposit to qualify. There are no early repayment charges, so landlords are free to repayment the mortgage at any time. They could even take a product transfer and switch to another rate.

 

Santander also provides a free property valuation and free legals service, or £250 cashback.

Aaron Strutt, product director at Trinity Financial, says: "Many landlords like flexible rates and this product enables them to remortgage off of expensive standard variable rates when their existing  lender does not offer any early repayment charge free products.

"The vast majority of landlords take two or five-year fixed rates but this is another option available to them particularly if they considering selling their property with the upcoming tax changes."

Representative example: A capital and interest mortgage of £250,000 payable over 25 years, initially on a 2.25% fixed rate until 02/05/2020 and then on a variable rate of 4% for the remaining 23 years, would require 14 monthly repayments of £1,090.33 followed by 286 monthly repayments of £1,309.54. The total amount repayable would be £390,053.06 made up of the loan amount, plus interest (£139,793.06) and £0 (product fee), £225 (final repayment charge), £35 (completion fee). The overall cost for comparison is 3.89% APRC representative.

 

The actual rate available will depend on your circumstances. Please ask for a personalised mortgage illustration.