2-year 2.19% fixed rate deal with no early repayment charges
- Published: Tuesday 06 June, 2017
- Category: BTL mortgages
- By: Matthew Bone
- Updated: Thursday 08 June, 2017
We highlighted this buy-to-let mortgage deal earlier in the year, which proved popular with many of you. We are revisiting the deal because the lender behind it has softened its criteria, opening it up to many more UK landlords.
Although there are other lower 2-year fixed rates available, this one is still very competitive and when you combine it with the accessible 75% loan-to-value (LTV) and the added bonus of no early repayment charges, this product is greater than the sum of its parts, making it a standout deal.
75% LTV 2-year flexx fixed rate buy-to-let mortgage
|Product type||Initial rate||Max LTV||Product fee||ERC's*|
|2-year fixed rate||2.19%||75%||£1999||N/A|
*Early Repayment Charge
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Flexibility to switch with no early repayment charges
Buy-to-let mortgages usually come with early repayment charges (ERCs) should you decide to switch products or pay off your loan during the initial rate or “deal” period of the mortgage. ERC’s are usually a percentage of the loan amount, which means they can be significant sums of money.
Lenders charge ERC’s to mitigate a) the lost income you would have otherwise paid them in monthly repayments, and b) the discount they have given you within the deal.
One of the standout benefits of this deal is that it comes with no ERCs, meaning should your circumstances change and you decide to switch product, or you decide to pay off your mortgage in full, you will not incur a penalty for doing so.
Please note: whilst this product does not carry a traditional ERC based on a percentage of the loan amount, if you pay off the mortgage above in full, the lender does charge a £125 mortgage exit fee.
Three criteria changes make this deal more accessible
With the buy-to-let sector having taken blow after blow from legislation and regulation changes alike, the relaxing of lender criteria makes a welcome change.
The softening of criteria makes this deal more accessible to a wider range of landlords.
The three criteria changes are:
- Removal of their minimum income requirement,
- Introduction of a new simpler tiered rental calculation, so those who earn less than £40,000 gross annually will benefit from a rental coverage of 125%, and;
- Removal of the minimum time in employment stipulation for applicants.
How will these changes benefit me?
No minimum income requirement
Previously, to secure this deal, you would have had to earn a minimum of £25,000.
The removal of this hurdle is welcome news for low taxable income earners, such as those self-employed, retired or those individuals who have fallen below this threshold in the past.
Please note: Whilst there is no minimum income stipulation, you will have to provide evidence of the income you do earn.
Favourable rental calculation
This lender has simplified the process for all applicants by introducing a 2 tier system centred on an applicant’s gross income. If you earn less than £40,000 gross annually (or under £40,000 combined on joint applications) this lender willuse a rental calculation of 125%. If you earn over £40,000 then the calculation will be 140%.
For more information on this, please speak to one of our advisors.
No minimum employment length
Lenders, formally including this one, typically require an applicant to have been in unbroken employment between 6-12 months.
This lender has removed this stipulation, opening up this deal to those who have recently moved or started a new job. You will need to provide proof of an income though.
Free valuation (purchases) and remortgage transfer service
This deal comes with a free valuation (instructed by the lender) of up to £700.00 on a purchase. If you are remortgaging, you can use the lenders free Remortgage Transfer Service, which includes free legal representation alongside the free valuation.
Mortgage criteria summary
- Available for properties in England, Wales, mainland Scotland or the Isle of Skye.
- For purchase and remortgage
- Maximum loan is, £1m up to 50% LTV, £500,000 over 50% LTV – 75% LTV
- Applicants must be no older than 75 years old at application
- Not available for limited companies, ex-pats or first time buyers.
Apply with one of our team of experts
If the deal above has sparked your interest and you would like to discuss your suitability, speak with one of our team today:
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.