Unusually, a buy to let lender has given us notice that a very popular product will be withdrawn on Monday 30th November 2015.
It’s very unusual for a buy to let lender to give us reasonable advanced warning of a rate withdrawal but a lender has done just that on one of its most popular limited edition products.
This semi-exclusive product which will be withdrawn on Monday 30th November 2015 is:
3.99% (4.2% APR) fixed for 5 years*
It has some pretty good features…
• Up to 80% LTV
• Remortgages only
• Loans up to £1m
• No credit scoring – each case individually assessed
• No portfolio restrictions – professional landlords and property developers welcome
• Max age 79 at application – 85 at end of term
• Don’t have to be residential home owners – if they already own a buy to let
• Will lend above commercial properties up to 75% (max 60% if above fast food outlets)
*Full product details can be found below.
Why is it so popular?
The rent to interest (RTI) cover calculation is a very generous 125% @ 3.99% (pay rate).
This is equivalent to a huge 240 x monthly gross rent which means that investors can borrow more than on most other products – the average RTI is normally 125% @ 5.00%.
Recently many lenders have revised their rent stress tests upwards so it is particularly disappointing that this rate is about to go.
What to do if you want this rate
You will need to act very quickly! If you are interested in this rate, do get in touch today as we will need to get a fully packaged application into the lender by Friday 27th November 2015.
The rate is from intermediary-only lender, Aldermore Mortgages. As a semi-exclusive offering, this product is only available via a limited number of brokers including Mortgages for Business.
My direct line is 01732 471608 or you can speak to any of my colleagues on 0845 345 6788.
Often lenders do not give us much (or any!) advanced warning of product withdrawals.
Not so long ago I submitted a buy to let mortgage application for a particular rate to a lender on behalf of a client. When the offer came back, the client noticed that the product was completely different.
Not only was it different, it was not anywhere near as competitive as the original one.
I contacted the lender and was told that the product we had been withdrawn on the day we submitted the application, so they substituted another in its place. (Nice of them to tell us – not!)
Naturally, I complained and after a bit of jostling, the lender offered the client a product that was actually much more competitive than the original rate she had chosen, so it all turned out well in the end.
Why are products withdrawn?
Lenders allocate tranches of funds for particular products. When the tranche has been used up, the products are withdrawn.
Usually, new products are introduced on a fresh tranche of funds. The rates are often very similar to the previous ones but may have different end dates.
Scheme: Rate Type: 5 Year Fixed at 3.99%. Overall Cost For Comparison (APR): 4.2%. Reversion Rate: 3.98% (lender's SVR, currently XXX - 1.00%). Purchase/Remortgage: Remortgage only. Max LTV: 80%. Max Loan Amount: £1,000,000. Min - Max Mortgage Term: 6 to 35 years. Min - Max Age: From 21 years to 85 years old. Income Required: No minimum. Repayment Options: Interest only or repayment. Rent to Interest Cover: 125% at 3.99%. Acceptable property locations: England, Wales, Scotland, Isle of Wight. Early Repayment Charges: 5% of the amount being repaid for the first year, then 4.5% until the end of year 2, then 4% until the end of year 3, then 3.5% until the end of year 5 from draw down (Overpayments of up to £5,000 can be made in any 12 month period without incurring an early repayment charge). Lender Arrangement Fee: 1.5 % due on completion. Broker Fee: A broker fee of £497 will apply (other fee options available).