Mortgage Express/Bradford & Bingley

Pennypound

Hello

I have a buy to let mortgage (interest only) with Mortgage Express who I understand are part of Bradford & Bingley.

The fixed rate ends on 30th September 2008. It is going to revert to a tracker mortgage of 1.75% above base rate for the remainder of the term (approx 23 years) on 1st October 2008.

I shopped around for a new fixed rate deal a couple months ago and could not find a cheaper fixed rate (it will currently revert to 6.75% - this is dependant on the base rate remaining at 5%). Once new mortage fees were taken into account I came to the conclusion I was better off staying with Mortgage Express. I intend to make a lump sum payment to reduce my captial sum.

As a result of the current press reports I am now getting concerned whether it is the right thing to stay with Mortgage Express and/or make the lump sum payment or should I remortgage with another institution even if it costs me mortage fees which could be £1,600 in the short term. I still think 6.75% is quite a good rate. I have good equity in the property and would think another lender will take the property on but it seems there are not many deals around.

Any advice/suggestions/comments would be welcome.

Thank you.

koexelek

6.75% ( with no tie ins) is indeed a decent rate on a buy to let mortgage at the present time.

Personally, I'd stick with ME on that rate.
If things took a turn for the worst , and they wanted to offload the mortgage to another company on an uncompetitive rate, you are not tied in, so you could then remortgage elsewhere if you had to

Pennypound

Thanks for the reassurance Koexelek:beer:

herbiesjp

It will all depend on what figures you are looking really, in terms of what rates will be available to you

The lower the LTV the better rates available.

What is a realistic property value?
What is the mortgage amount?
What is the rental income?

BTL rates have come down over the past couple of months, however some lenders are starting to inch rates up again

Pennypound

Dear Herbiesjp

Realistic value for the property is in the region of £170,000. Looking to remortgage for £80,000 and the current rent is £675 per month. I have seen some recent rates just below 6.75% but high arrangement fees make it not worth while. Any suggestions?

Many thanks.

herbiesjp

If you are looking at deals that include free legal fees and free valuations, you could be looking at rates from around 5.44% with fees that you mention. As you work your way up you can find deals with slightly lower fees

If you did not want the free legal fees etc. you could be looking at deals from around 4.50% - again with higher fees attached to these lower rates

I dont know anything about your details so cannot comment on lenders for you, as they all have differeing criteria and rental calculations, and minimim personal income requirements

RecoveringAlcoholic

A gross return before any costs of 4.76%

Why bother?

Husband_of_a_spendaholic

koexelek wrote: »

6.75% ( with no tie ins) is indeed a decent rate on a buy to let mortgage at the present time.

Personally, I'd stick with ME on that rate.
If things took a turn for the worst , and they wanted to offload the mortgage to another company on an uncompetitive rate, you are not tied in, so you could then remortgage elsewhere if you had to

When a mortgage company transfers a mortgage to somebody else, the original terms and conditions still apply. On your particular mortgage, the rate you are currently on tracks the Bank of England rate at 1.75% above.

The 1.75% is a fixed margin, so MEX or a successor cannot change this.

The only issue will be if you want to drawdown any equity to make improvements to the property - from Monday, Mortgage Express stopped taking new Further Lending applications

sdooley

Is it 1.75% above Bank of England base rate?

Or above your bank's base rate?

Or above LIBOR?

The difference could be quite big. BoE is obviously the best rate to track at the moment.

Treadmill

The rate is above BoE base rate, I read an article saying that because the Mortgage Express rate is quite competitive once the fixed period has ended not many people are moving to other lenders, which is what Mortgage Express/B&B would prefer.

PayDay

Treadmill wrote: »

The rate is above BoE base rate, I read an article saying that because the Mortgage Express rate is quite competitive once the fixed period has ended not many people are moving to other lenders, which is what Mortgage Express/B&B would prefer.

It's the defaults on the buy to let mortgages that have got B&B in this mess. I can't see them wanting to encourage people to stay.

http://www.money.co.uk/article/1001541-bandb-taken-into-government-control.htm