We were approached by a father and son looking buy their very first rental property together – a three-bed terraced house in a popular Home Counties town.
The father is retired on a modest pension of around £10k pa and has a large pot of savings, some of which will be used as the deposit.
The son is unemployed still living happily at home with his parents.
Despite his advanced age and earnings of less than £25k pa, as the father owns the family home outright, the lender deemed him a good risk as the main mortgage applicant, particularly as he had a deposit of 45%.
The father wanted his son to be named as the second applicant in order to get him onto the property ladder.
We approached one of the leading, mainstream buy to let lenders which will accept borrowers up to the age of 90 at the end of the mortgage, and the following rate was offered:
Property value: £365,000
Loan amount: £237,250
Rate: 2.19% 2 year fixed
Term: 25 years
Borrower: Joint application: 2 x personal borrowers
Interest only or capital & interest: Interest only
Mortgage payment: £432 pcm
Lender arrangement fee: £1,995
Rental income: £1,200 pcm
Gross yield: 4% pa
Consultant: Chris Longhurst, 01732 471607