New Foundation product includes pay rate in rental calculation

Foundation Home Loans has launched a five-year fixed rate buy to let product that uses the pay rate for rental calculations over the notional rate

The lender believes that customers will benefit as a result while it provides more options for those considering investment in the buy to let market.

The new five product is priced at 4.39 per cent and the rental calculation will be determined based on that figure.

Other products in the range use a notional rate of 5.25 per cent, highlighting the different between the two product options.

A new three-year fixed rate product at a rate of 3.89 per cent has also been launched by Foundation, as well as a variable rate deal priced at Libor plus 3.41 per cent.

The lender’s two-year fixed rate has been reduced by 30 basis points to 3.69 per cent as part of the recent batch of changes.

These changes provide buy to let landlords and investors will more options when assessing whether to expand or consolidate their existing property portfolios.

Paul Brett, Business Development Director of Foundation said the decision to reduce rates and introduce new three and five year products was “identified as an important addition we needed to make”.

“By allowing the rental yield calculation of 4.39 per cent rather than the notional rate, we believe this will allow more customers to benefit from our compelling lending proposition,” he explained.

“I believe that introducers will be delighted by these changes, which will appeal to more landlords looking to lock into a longer term product.”

Author