Birmingham Midshires launches buy-to-let tracker

Birmingham Midshires, part of the HBOS group, has secured an exclusive distribution agreement with John Charcol, one of UK’s largest independent mortgage brokers.

John Charcol will market a new Birmingham Midshires tracker mortgage aimed at the buy-to-let market.

The mortgage guarantees to keep interest repayments at 0.06% below the Bank of England’s base rate, for three years.

It starts on a highly attractive 5.69% interest rate that will provide strong competition for other buy-to-let lenders, such as Paragon.

Loan-to-value ratio is up to 85%, which compares with a loan-to-value ratio on new business of 68%, from Paragon.

Borrowers will need to show a tenancy income to interest repayment ratio of 100%, rather than 125%, which is the norm in the buy-to-let sector.

According to an HBOS spokesman, the new mortgage offer is “part of a product refresh … we are pricing in line with the market.”

However, the new product is likely to damage the market share other buy-to-let lenders.

The launch is particularly bad timing for Paragon, which is moving towards a liquidity crisis that some do not expect the company to survive.

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