The buy to let market has been hard hit in recent months, making it less attractive for both existing landlords to remain in the market and would-be landlords to enter it. Additionally, the EU’s Prudential Regulation Authority (PRA) came into effect on the 1st January 2017, changing the way buy to let mortgages should be underwritten. Therefore, subjecting investors to more restrictions, making it even more difficult for them to get a mortgage in the first place due to more stringent affordability checks.
Whilst many lenders will now only lend on the basis of the rental income covering 145% of the mortgage, one of the brokers here at Enness has identified a product which will help landlords looking to maximise their borrowing. Our Product of the Week is a pay rate product which allows the monthly rental income to cover the mortgage by 125%, with a 3.6% discounted variable rate over a five-year term, with the option of three years’ early reduction charges.
- Rate of 3.6%
- Five year discounted variable rate
- Three years’ early reduction charges
- Rental income must cover 125% of mortgage payments
We are experienced in helping landlord maximise their borrowing and in turn their property portfolios. With the additional 3% stamp duty implemented on second homes and buy to let properties, as well as a reduction in tax relief, would-be landlords are being deterred from entering the market so we are pleased to see that there are lenders who are still encouraging this type of investment.
If you are interested in this product, please do not hesitate to get in touch as we would be more than happy to introduce you to the relevant lender and provide expert advice for your circumstances.