BTL mortgage with no ERCs for first-time landlord

BTL mortgage with no ERCs for first-time landlord

24.10.17 | Written by: Chris Longhurst

A sales manager from Kent approached us looking to invest in his first buy to let property.

After researching different rental areas, he had settled on a two-bed flat located within walking distance of his own home.

The property in question was slightly out of his budget, so his parents had offered to gift the remainder of the deposit required.

On the advice of his accountant, he had set up an SPV limited company through which to make the purchase.

The client had two requests:

  1. A high loan to value product, so his parents only had to gift him the minimum amount
  2. A product with no (ERCs) early repayment charges, in case he decided to sell up within the first six months

There is a small appetite for first-time landlords operating via limited companies and the options reduce even further when looking for high loan to value products with no ERCs.

We took the case to a lender which cannot be accessed directly via the public. We spoke with the underwriter and highlighted the merits of the case. Happy that the client was a good risk an offer was made.

Once offered the case took just over 3 weeks to complete.

Property value: £237,500

Loan amount: £180,523

LTV: 76%

Rate: 3.49% 2 year discounted

RTI: 145% @ 5.5%

Term: 25 years

Mortgage payment: £533

Lender arrangement fee: 1.5%  - £2,707

Rental income: £1,050pcm

Gross yield: 5.3%pa

Consultant: Chris Longhurst, 01732 471607

ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.