Virgin Money has unveiled its latest range of 2 and 5 year fixed rate buy to let mortgages, which look to combine relatively low fees with a decent cashback offer.
The lender is now offering a £750 cashback offer in order to help landlords to make a saving – compared to the lower rate mortgage deals elsewhere on the high street on an overall cost basis. As such, landlords currently have access to some of the cheapest ever buy to let rates in wake of the recent news that tax relief and stamp duty changes are set to come into force in 2016.
Virgin Money buy to let rates have now fallen below 2% for 2 year fixes, while 5 year deals are now under 3% for property investors able to compromise and put down a much higher deposit.
The £750 cashback offer comes as great news to landlords looking for a decent deal before changes occur, as the market is set to get tougher from next year with stamp duty charges and changes to mortgage interest relief.
Virgin Money is now offering a rate of 2.59% with a £,1995 fee for 75% loan to value’s (LTVs), as well as a 2 year fixed rate of 1.99% with a £1,995 fee plus £750 cashback. Monthly payments calculated with this rate on a £150,000 mortgage, for example, would work out at £248 when arranged over a 25 year term. In comparison, Accord Mortgages currently boasts the lowest 2 year fixed rate for a buy to let mortgage at 1.84%. However, the hefty £2,625 fee pushes up the overall cost. This means that even before the cashback offer, the overall cost of Virgin Money’s product is cheaper including fees.
This is an example of the glitches to look out for when shopping for low rates. With Virgin Money’s latest release, when taking cashback offers into account, the overall cost of Virgin Money’s product would work out much cheaper for landlords.