The lender is not offering loans up to 75 per cent of valuation for the first time since re-entering the BTL market a year ago. Its previous maximum LTV was 70 per cent and Skipton hope the increase will enable more people who are interested in property investment to do so.
One of the new deals at 75 per cent LTV is a five-year BTL fixed rate at 5.69 per cent for loans up to £500,000. This deal comes with free valuation up to £615 for properties valued up to £500,000 and free legal fees for remortgages. Capital repayments of up to 10 per cent a year are allowed without penalty on the fixed-rate period, but exceeding this results in an early repayment charge. This reduces from 5 per cent of the amount repaid in year one, 4 per cent in year two and 3 per cent in years three to five plus interest to the end of the month
Defaqto insight analyst for banking David Black says: “Looking at the five- year fixed rate BTL mortgages available, the keenest rates are for 60 per cent and 70 per cent LTV mortgages. The average rate charged at 75 per cent LTV is 5.52 per cent with a £2,023 fee and the Skipton’s new offering can be beaten by some of the alternatives available.
“There is a substantial premium both in terms of interest rate and arrangement fees for BTL mortgages compared to their counterparts in the residential mortgage market. By way of example, compare the figures above to the non-BTL residential five-year fixed rate mortgages at 75 per cent LTV where both the average rate and fee charged are much lower at 4.34 per cent and £654 respectively. It is not surprising that many lenders have been eyeing up the BTL market.”