Rare 125% at 5.0% affordability calculation on 2-year fixed buy to let
- Published: Tuesday 05 December, 2017
- Category: BTL mortgages
- By: Andrew Pelis
- Updated: Tuesday 09 January, 2018
If mortgage affordability calculations with other borrowers have stopped you from securing an adequate loan size for your next investment, this product may help.
This lender calculates affordability at 125% rental coverage and 5.0% stressed rate, whereas many others use 145% and 5.5%. This can make quite a difference to the amount you will be able to borrow:
On a rental sum of £1,000 per month, this is a difference of £41,530 of extra borrowing:
Annualised rent £12,000 at 145% rental cover and 5.5% stressed rate = £150,470 loan
Annualised rent £12,000 at 125% rental cover and 5.0% stressed rate = £192,000 loan
Portfolio landlords: There are no restrictions on the size of your portfolio and the deal is assessed on its own merits, not within the context of your wider portfolio.
First-time landlords (but not first time buyers) are eligible, subject to criteria.
2.59% BTL purchase or remortgage at 75% loan to value
|Product type||Initial rate||Max. Loan to Value||Product fee||*ERC's|
|2-year fixed||2.59%||75%||1%||For 2-years|
*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.
This lender will consider properties with the following quirks that some others may not, subject to wider criteria:
- Up to 6 bedrooms in one property
- Studio flats with a minimum floor area of 35 square metres
- A flat in a block of up to 5 storeys where the property is outside the M25
- A flat in a block of up to 10 storeys, where the property is within the M25
- New build houses
- Converted freehold properties
Houses in Multiple Occupation (HMO) and Multi-Unit Blocks (MUB) are not eligible for this deal; however, existing properties of this type within your portfolio are acceptable.
The lender will consider the following types of tenancy:
- 6 or 12 month Assured Short-hold Tenancies (AST)
- Student Lets
- Corporate Lets (subject to prior approval)
- Local Authority and Housing Association Lets (subject to prior approval)
A maximum of 4 applicants is allowed.
The primary applicant must have been a property owner for a minimum of 12 months.
The minimum age of applicants is 25 years-old; the maximum age at the end of term is 85 years-old.
All applicants must have been resident in the UK for at least three years and have permanent rights to reside. They must also be registered on the Electoral Roll at their current address and possess a National Insurance Number.
The main applicant must have a minimum annual income of £25,000, from the following sources:
Employed: You must have been in continuous employment for a minimum of 12 months, and have passed your probation period.
Self-employed or a contractor: You must have been trading for a minimum of 2 years in your current business.
Retired: You must be in receipt of annual income of at least £25,000.
Applicants may demonstrate income with any of the following:
- Most recent 3 months of payslips
- Latest SA302
- Latest Signed Accounts
- Latest Pension Statement
Additionally, the lender may wish to see up to 3 months of Personal Bank Statements.
Mortgage term, value and location:
Mortgage term: Minimum of 5-years; maximum of 35-years.
Minimum loan £25,001, maximum loan £200,000
Property must be located in England or Wales.
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.