FHL improves buy to let offering with dedicated HMO product

Specialist lender, Foundation Home Loans (FHL) has widened its buy to let offering by launching a new Houses in Multiple Occupation (HMO) product, which will be available to both individual and limited company landlords.

The lender’s new HMO loan starts at a rate of 3.19% for a two-year fixed rate deal. The five-year product comes in at a rate of 3.49% for a maximum loan-to-value (LTV) of 65%, or 3.79% at an LTV of 75%. There is no pricing differential for limited companies.

FHL will apply the same rental stress calculation that it uses on all its other products. For limited company applications, the five-year fixed rate product will be subject to 125% x pay rate, for example. An individual borrower will be subject to 145% x pay rate on the same product.

A maximum loan size of £500,000 applies and the maximum loan term is 30 years, which stipulates a maximum age of 75 years at the end of the loan term for individuals. There is no maximum age for limited company applicants.  An arrangement fee of 2% applies to all products.

Marketing Director at Foundation Home Loans, Jeff Knight, said:

“We know that landlords with HMOs continue to achieve the highest rental yields - 1.1% above the average according to recent research by BDRC and seem to be growing in popularity. Speaking to some of our intermediary partners, they are very delighted to be able to offer more choice to their clients with our new product range to help with their demand.”

FHL products are designed for borrowers with complex needs and are only available through intermediaries. These new HMO products complement the lender’s recently launched residential proposition.

 

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