2.20% 2-year discounted variable at 60% LTV free valuation, no product fee
- Published: Friday 12 May, 2017
- Category: BTL mortgages
- By: Matthew Bone
- Updated: Monday 05 June, 2017
Trying to strike the right balance between product fees and low rates can be a dilemma when looking for the right mortgage. Often, you may find yourself having to choose one or the other. So do you sacrifice your competitive rate for lower upfront costs or vice versa?
With the product below, you don’t have to. It offers a good rate and it comes with no product fee. So for those who want to keep their initial mortgage costs down, you can do so without foregoing that all-important low rate.
2-year discounted variable buy-to-let mortgages
|Product type||Initial rate||Max LTV*||Product fee||ERC's**|
|2-year discounted variable||2.20%||60%||£0||For 2 years|
*Loan to Value **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.
Rental coverage and loan amount
Rent must cover mortgage payments by 145% at a rate of 5.5% per annum.
You can borrow up to £500,000, but this is subject to minimum personal income criteria. For buy-to-let property, the minimum sole income is £20,000. For joint calculations, either one person must earn a minimum of £20,000, or the combined income of both parties must be at least £30,000.
With holiday lets the income stipulations are as above, with one further criteria point, wherein for loans over £250,000 the minimum personal income is £80,000 solely or, for joint applications, combined.
Free additional benefits
If you are purchasing a property, you will be eligible for a free standard lender valuation.For remortgages, the lender offers a free legal service.
Holiday lets at 75% loan to value (LTV)
This lender is one of only a handful on our panel who will accept applications for holiday lets and the LTV for this property type is higher, at 75%.
If you are considering this product for holiday let, this lender does have some additional criteria, outlined below:
- Properties must not be located in a holiday park or have an occupancy restriction.
- Maximum of 1 holiday let with this lender
- For loans over £250,000, you must have a minimum income of £80,000 (either sole or joint)
The lender also requires a letter from your local holiday letting agent confirming the weekly letting rates for the property for the low, mid and high seasons, in order to work out the average rental income for the property.
For more information on this, please speak to one of our advisors
What is a discounted variable rate?
A discounted variable rate offers a discount on the lender's Standard Variable Rate (SVR) and is set for a given period, in this case 2 years. After the initial period, the rate will revert to the lenders SVR or you can remortgage to a new deal or sell the property.
As the description of the deal implies, your monthly repayments could go up or down.
How a discounted variable rate works
To follow is an illustration of the way in which a discounted variable rate works (it does not relate to this deal):
If a lender's SVR is currently 4.74% and the mortgage has a 2.54% discount on the rate for two years, you will pay 2.20% over that period.
Should the lender’s SVR go up 0.20% to 4.94% during your initial 2-year period, your discounted rate would go up to and in this example become 2.40%. Conversely, if the lender’s SVR goes down 0.20% to 4.54%, your discounted rate would go down to become 2.00%.
The rate quoted in the table above, applicable to the deal we are describing, shows the rate you will pay based on the current SVR of this lender, which is subject to change.
Mortgage Criteria Summary
- Available for properties in England and Wales
- Minimum income for sole applicants, £20,000
- Minimum income for joint applications, £30,000 in combination or one person must earn a minimum of £20,000
- Maximum age at end of application 75 years old
- Minimum age at application is 21 years old
- Maximum loan is £500,000
- Not available to ex-pats or limited companies
Apply with one of our team of experts
If you feel this product could be of benefit, speak to one of our team today:
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.