Type: Buy-to-let discount remortgage product
Discounted term: Three years
Payable rate: 5.49%
Minimum loan: £40,000
Maximum loan: Up to 85% of valuation subject to a maximum of £250,000, up to 75% of valuation subject to a maximum of £550,000, up to 70% of valuation subject to a maximum of £1m
Income multiples: Rental income must be at least 125% of mortgage repayments
Conditions: Unlimited properties allowed within a total maximum of £2m
Arrangement fees: £599
Redemption fees: 5% of the amount repaid in fort three years
Introducer’s fee: 0.5% of the original loan
Tel: 08707 590170
This buy-to-let remortgage product has a 1.01 per cent discount for three years, giving a payable rate of 5.49 per cent.
According to John Charcol product specialist Ash Sharma, with buy to let lending on the increase, more and more lenders are trying to find new ways of bringing products to intermediaries to grab a slice of the pie.
“One such product is funded by Mortgage Express and is available via Pink Home Loans. The rate is 1.01 per cent discount for three years with an underlying rate of Bank of England base plus 1.75 per cent to give a current ray rate of 5.49 per cent.”
Sharma notes the product has early repayment charges of 5 per cent for the first three years and has an arrangement fee of £599.
“As a remortgage only product, this product provides a free standard valuation and also offers a free standard legal fees provided the lenders solicitor is used. The rental calculation is 125 per cent at the pay rate,” says Sharma.
Another great feature of this product in Sharma’s view is the flexible features on offer. “Overpayments, underpayments and a drawdown facility are all available,” he says. “Not many lenders can offer this but most of them have come in with the offer of a free valuation and free legal fees on remortgages.
Looking at the less appealing features of the deal Sharma says: “The maximum loan amount is £1m, but the LTV up to £1m is only up to 70 per cent, unlike most lenders who will go to 85 per. cent.”
Scanning the rest of the market for possible competitors Sharma says: “Principality has a buy to let product at a pay rate of 5.34 per cent – base plus 0.59 per cent – for three years. This has free valuation and free legal fees but no flexible features. UCB also has a product, which has the same pay rate, same flexible features and a free valuation. It, is available to all and has a rental calculation based on 125 per cent at base plus 1 per cent.”
Suitability to market: Average
Competitiveness of rate: Average
Adviser remuneration: Good