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£1m threshold on self-cert deals

Lender Irish Permanent is relaunching its self-certification let-to-buy product, setting a £1m threshold on borrowing.

Under the new loan, self-employed borrowers are able to remortgage their existing property up to the value of £500,000 through self-certification so it can then be let.

They will then be allowed to borrow a further £500,000 loan towards a second property being bought as their main residence. The new £1m limit replaces the £500,000 threshold that has applied up until now on self-cert deals.

The loans allow borrowing of up to 85 per cent loan to value on the existing property and 90 per cent on the new property.

The loan tracks the Bank of England base rate plus 1.25 per cent for the life of the loan. This is discounted by 0.26 per cent for the first two years, giving a current rate of 4.74 per cent.

Irish Permanent offers an uncapped 0.5 per cent procuration fee on both parts of the deal, which could result in a potential £5,000 fee if the advance is £1m in total.

Senior UK manager Mike Healy says: “Not many lenders will do 90 per cent self-certification loan and certainly not with an exposure of £1m. Self-employed applicants will be able to get larger advances and more helpful LTVs.”

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