As we have recently reported, many buy to let brokers are concerned about upcoming changes to how portfolio landlord applications will work once tougher underwriting standards are introduced at the end of September. As a sign of our ongoing commitment to portfolio landlords, our product of the week is a buy to let product for landlords looking to purchase or remortgage a HMO (Houses in Multiple Occupations) held in a Limited company.
Houses in Multiple Occupations (HMOs) are a special type of buy to let property, in which tenants are their own ‘households’—that is, three individuals could be living within the same property and sharing facilities, but with separate tenancy agreements. The government defines a HMO as:
“A property rented out by at least 3 people who are not from 1 “household” (e.g. a family) but share facilities like the bathroom and kitchen. It’s sometimes called a “house share”.
HMOs are more attractive because they are usually more profitable than joint tenancies, but the buying and running costs are typically higher. It is more complicated to underwrite these mortgages, and they can be more expensive. This product can be used by portfolio landlords for loans up to 80% loan to value (LTV).
The lender’s LIBOR tracker product offers a rate of 3.6%, and as an additional bonus, there is no product fee. On a larger loan, this could save you a significant sum of money, so this is well worth considering.
- 2 year LIBOR tracker
- No product fee
- Up to 80% LTV
However, if you do prefer the security of a fixed product, the lender also offers a range of fixed rates at the same LTV.
- 2-year fixed at 3.50%, with a 1.5% product fee
- 5-year fixed at 3.74%, with a 2.0% product fee
- 10-year fixed at 4.74%, with a 2.0% product fee
Whatever your preference is, we are experts in supporting landlords with their buy to let mortgage needs. Upcoming Prudential Regulation Authority (PRA) changes will mean new challenges but we are prepared to meet these.
Rental calculation for this product is based on individual circumstances.