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A new online mortgage product has been launched, aimed at the buy to let sector but cashing in on public dissatisfaction at poor interest returns for savers.

Landbay has launched two so-called peer-to-peer' products in a bid to attract landlord borrowers.

One is a five-year tracker product paying lenders the Bank of England base rate plus three per cent - so currently 3.5 per cent.

The second product is a fixed rate currently paying lenders 4.2 per cent for three years, reverting to the tracker rate for the remaining two years.

Both products rely on individuals saving with Landbay to secure these levels of interest - obviously far higher than they would get in a conventional bank or building society savings account - and the minimum saving is £100.

These savers then effectively become lenders. Landbay claims it is acting responsibly by only lending to what it regards as the most secure sector of the buy to let market - existing and experienced landlords - at responsible loan-to-value ratios.

Rental income from the property must exceed 125 per cent of the monthly repayments required for the mortgage, and lending on the tracker and fixed rate products is restricted to a maximum of 72 per cent LTV.

The properties are vetted and valued by a RICS-qualified surveyor and then double checked by an independent panel, says Landbay.

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