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You are here: Home / Uncategorized / BM Solutions Buy-to-let Trackers: time to switch to a fixed rate?

by Payam Azadi

BM Solutions Buy-to-let Trackers: time to switch to a fixed rate?

What Birmingham Midshires Buy-to-let Trackers need to do

Is now the right time to switch your buy-to-let mortgage from BM Solutions variable Tracker to a Fixed Rate? Remortgage or Product Transfer.

Mortgage Trackers on the rise! Could this be the end of low interest rates for now?

I’m not going to pretend I’m an Economist but the warning signs are there for Tracker mortgage holders, even those with small loadings over Bank of England Base Rate such as BM Solutions buy-to-let trackers.

  • The Consumer Price Index which measures inflation rose more in the 12 months to January 2022 than any other 12 month period since stats began in January 1997.
  • Energy prices are already high and the price cap on domestic electricity and gas ends this month (31/3/2022).
  • The Bank of England Monetary Policy Committee (MPC), the panel that sets interest rates, voted for an increase to 0.5% to BoE Base Rate in February. In was a close call with 4 of the 9 voters preferring a higher increase to 0.75%. In any event even the smaller move effectively doubled interest rate benchmark from 0.25%, itself a rise from the pandemic rate of 0.10% and highlighted the direction of flight.
    It however fair to put this in perspective as in 2007 the rate was 5.50%.
  • Fresh off the press large mortgage provider NatWest part of The Royal Bank of Scotland have announced a second rate rise on their fixed rate in four days (10/3/2022 and 14/3/2022) supporting the worry on mortgage interest rates right now.

BM Solutions: Guard Against Rate Rises by Fixing Your Rate

My business partner Richard was at the official launch of the BM Solutions “One Minute” mortgage system all those years ago which revolutionised the buy-to-let market. Leading them to be ultimately owned by the Lloyd’s Banking Group, and being the recognised HBOS brand for buy-to-lets.

Thousands of BM Solutions buy-to-let customers will be on Bank of England Trackers with typical margins of 1.99% plus Bank of England Base Rate and must be seriously contemplating product transfers or remortgaging in light of the news. Remember product transfers with BM Solutions require little underwriting. Either way we can help with the process.

And, better industry news came from Nationwide on 2nd March 2022, one of the UK’s larger mortgage lenders, said it was the biggest cash increase in property prices since it started collecting comparable data in 1991. With the price of average UK homes moving to £260,230 in February. This could mean you have more equity in your buy-to-let than thought which may attract better rates.

Buy-to-let 5 Year Fixed Remortgage Rates

So what fixed rates are offer? Below gives details of the some of the remortgage rates currently on offer but don’t expect them to be there for long:

Buy-to-let 5 year fix with 40% equity

Rate switch methodRemortgage to new lenderProduct transfer with BM Solutions
Initial rate2.09%2.64%
Subsequent reversionary rate4.74%4.84%
The total amount you must pay back, including the amount borrowed is£370,656.50£377,509.00
Overall cost of comparison APRC4.1%4.3%
Type and initial benefit periodFixed rate until 31/05/2027Fixed rate until 31/07/2027
Minimum equity40%40%
Lender valuation feeFreeFree
Lender booking fee£Nil£Nil
Lender product fee£995£Nil
Cashback from the Lender£Nil£Nil
Basic legal costsFreeFree
Lender nameThe Mortgage WorksBM Solutions
Underwriting levelFullLight
Our broker fee chargeFrom £499No charge

Buy-to-let 5 year fix with 25% equity

Rate switch methodRemortgage to new lenderProduct transfer with BM Solutions
Initial rate2.09%2.98%
Subsequent reversionary rate3.75%4.84%
The total amount you must pay back, including the amount borrowed is£419,208.36£475,777.75
Overall cost of comparison APRC3.4%4.4%
Type and initial benefit periodFixed rate until 02/06/2027Fixed rate until 31/07/2027
Minimum equity25%25%
Lender valuation feeFreeFree
Lender booking fee£Nil£Nil
Lender product fee£1,499£Nil
Cashback from the Lender£Nil£Nil
Basic legal costsFreeFree
Lender nameSantanderBM Solutions
Underwriting levelFullLight
Our broker fee chargeFrom £499No charge

Buy-to-let 5 year fix with 20% equity

Rate switch methodRemortgage to new lenderProduct transfer with BM Solutions
Initial rate2.94%Not available to 80% loan-to-value
Subsequent reversionary rate4.49% 
The total amount you must pay back, including the amount borrowed is£491,764.00 
Overall cost of comparison APRC4.1% 
Type and initial benefit periodFixed rate until 30/06/2027 
Minimum equity20% 
Lender valuation fee£Free 
Lender booking fee£Nil 
Lender product fee£995 
Cashback from the Lender£Nil 
Basic legal costsFree 
Lender nameAccord 
Underwriting levelFull 
Our broker fee chargeFrom £499 

If you are a Birmingham Midshires Buy-to-let client why not get in touch to see if we can save you money.

WE DON’T HAVE TO MEET YOU

We can deal with all our clients by Phone, Whatsapp, Skype, Email and Post.

Contact us

NOTES

* Rates as at 12/3/2022.
* Figures produced using Twenty7tec software.
* True Cost factors in the interest rate, mortgage set-up costs, and any cashback rebates. It assumes the product fee is paid.
* The comparison is based on an assumed purchase price of £300,000 over a 25 year mortgage term.
* It looks at the repayment method of “Interest only” for Buy-to-let.
* Eligibility will depend on your own personal circumstances.                                                                      

Your Property is at Risk if you do not keep up with your mortgage repayments.

Niche Advice arranges mortgages and is not a Lender.

Payam Azadi

Author: Payam Azadi

Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines. To get in contact with him please click here.
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AS A MORTGAGE IS SECURED AGAINST YOUR HOME OR PROPERTY, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.

If you are thinking of consolidating existing borrowing you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.

Niche Advice Limited is a Credit Broker and does not lend money directly to clients. Niche Advice Limited is authorised and regulated by the Financial Conduct Authority. FCA Number: 750263.

Commercial Buy-to-Let and commercial mortgages are not regulated by the Financial Conduct Authority.

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