No ERC on 2-year discounted variable rate, from 2.99% per annum

Man signs a document

In broad terms, there are two schools of thought on attitude to risk. Some landlords require a wholly quantifiable approach, wherein a fixed rate with known monthly repayments suit their investment objectives. Others have a surplus of rental income and a steady income from a source outside their portfolio and are looking to cash-in when rates are low. 

An investor who has the opportunity to take a more flexible approach to risk may choose variable rate products to achieve their objectives because they take advantage of the financial benefit when rates are low (whilst coupled with the risk of rates and their repayments, rising).

If you subscribe to this second group, the following products may be exactly what you are looking for.

65% LTV* 2-year discounted variable rate buy-to-let mortgage

65% LTV* 2-year discounted variable buy-to-let
Product typeInitial rateMax LTV*Product feeERC's**
2-year discounted variable 2.99% 65% 1.5% None

75% LTV* 2-year discounted variable rate buy-to-let mortgage

75% LTV*2-year discounted variable rate buy-to-let
Product typeInitial rateMax LTV*Product feeERC's**
2-year discounted variable 3.19% 75% 1.5% None

* 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.

Enquire online about these deals

The 75% LTV (*Loan to Value) deal favours a wide range of property investors who have kept to the commonplace balance of lender borrowing versus capital investment. The 65% LTV deal works even harder for those who benefit from a larger equity amount.

The benefit with both is that there are no ERC’s (**Early Repayment Charges) to pay if you want to switch product, sell or pay off lumps sums from the loan amount.

No exit penalty

It is becoming much less common for lenders to offer ERC-free products, even amongst variable rate deals, given the risk that with rates at such a low the advantage is very much on the side of the borrower. For this reason, this product should pique many landlords interest.

Secure this mortgage today and you can exit to another lender at any time.

Limited Companies and Limited Liability Partnerships (LLP)

This lender welcomes both of these company structures as long as they are dedicated specifically to investment in property and no other activity, evidence of this will have to be provided.

All directors (limited company) must sign a personal guarantee and take independent legal advice.

All members (LLP) must have personal guarantees in place to cover 100% of the loan.

Other criteria applies, your advisor will provide you with the full details.

House in Multiple Occupation (HMO), Multi- Unit Blocks (MUB), Student lets

Whether investing as an individual or through a limited company, this lender accepts applications for HMO or MUB property under one title. The criteria below must be fulfilled:

  • Up to 8 bedrooms, subject to valuation, with all necessary consents and ASTs in place, occupation must be within 30 days of completion. If you already own an HMO, a property with more than 8 bedrooms may be accepted.
  • HMO purchase - a licence must be in place or application submitted on completion.
  • All HMO remortgages require a licence to be in place on completion.

Ex-pats

These specific products are not available to expats; however, the lender does have an ex-pat range (rates will differ). If you are interested in the ex-pat range with this lender, you must have a three-year residency history, have lived/worked in the UK for the last three years and should appear on the voters roll.

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 period. After that initial period, the rate will revert to the lenders SVR.

Your monthly mortgage repayments may go up or down if the lenders variable rate changes.

How a discounted variable rate works

If the lender's SVR is currently 5.00% and the mortgage offer a 2.00% discount on the rate for two years, you'll pay 3.00% for that period.

If the lender’s SVR goes up 1.00% to 6.00% during your initial 2-year period, your discounted rate would become 4.00%. Conversely, if the lender’s SVR goes down 1.00% to 4.00%, your discounted rate would 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 SVR of this lender.

Mortgage criteria summary

  • Available on properties in England and Wales.
  • For purchase or remortgage
  • Self-employed applicants accepted
  • Available for limited company/LLP, HMO and MUB
  • Minimum loan is £75,000
  • Maximum loan £1,000,000
  • Maximum age 85 years old at the end of the mortgage term
  • Applicants should have lived/worked back in the UK for minimum 3 years

Call us on 0800 032 6388 or enquire online

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.

Top