Help needed choosing a buy to let mortgage

tompparker

Hi,

I'm trying to decide between two £85k 25-year buy to let mortgages:

One is the Post Office, initial rate for 3 years of 6.89% fixed, 2.49% (1.99% above base rate) thereafter. Arrangement fee £600.

The other is NatWest, initial rate for 2 years of 4.89% (4.39% above base rate), 4.5% thereafter (4% above base rate). Arrangement fee £2000.

In the long term the Post Office option is much cheaper even (in fact especially) if rates go up, but would it be better to go for the NatWest one then switch after the 2 year period?

Any advice greatly appreciated!

Thanks in advance.

herbiesjp

What is the property value?

What is the rental income?

tompparker

Hi herbiesjp, thanks for your reply. The property value is £114,000 (terraced house), rental income £1120 gross (bills included) c. £750 net, student let 4 tenants in situ until July 2010.

V_J_Conn

have you checked the post office will lend against a student let with tenants in situ?

herbiesjp

Not all lenders are happy with student lets - so make sure you fit criteria before applying.

tompparker

Thanks - both lenders have said they are happy to lend in this instance (i.e. students in situ).

JimmyTheWig

Have you currently got a mortgage which you could keep rather than switching to one of these? If so, what is that costing you?

tompparker

Hi, I don't currently have a mortgage I'm afraid. (Had a residential one before, sold flat and paid off in full.) Thanks.

V_J_Conn

are you going to live in the property as well?

Conrad

Remember the Post Office valuer will likely catch on thier are multiple tenants. I don't know the Post Office criteria but I think it highly unlikely they would offer to get involved in this type of commerical deal.

tompparker

Thanks. The guy when I rang the PO mortgages line said they do do student lets up to 4 people on assured shorthold tenancies but I'll double check if I do apply.