Jeni Browne, Head of Sales has something different for you – it won’t be for everybody but its got legs.
Introducing…… a stepped fixed rate.
So basically this is a five year fixed rate with a twist. In the first year, the rate is fixed at 2.75%, in year 2 it is fixed at 3.25%, year 3 is 3.75%, year 4 is 4.25% and year 5 is 4.75% - reverting to LIBOR plus 4.75% (currently 5.35%) thereafter.
So each year your payments will go up to a predefined rate.
This is why I think its good – over the 5 years the average rate you will pay is 3.75%* (5.2% APR) which for Ltd Co borrowing, is actually very competitive.
What’s more, you can take the reverse product, which starts high and goes down each year (same rates as above, just backwards).
For me, not only does this product represent very good value over the term, but it will allow you to plan for cash flow if you are expecting some costs either now (ie. you take the cheaper rate to start with) or in the future (you start high).
This product is available for SPV companies and individuals – other points to note:
• Max age of 80 at the end of the term
• No maximum of properties held in the background
• Minimum income requirement is £25k but this can be from property
• 75% LTV
• Lender fee of 2%
• Rental calculation is 125% at 5%
*Stepped Fixed at 2.75% for 1 years (to 31/10/2017), then 3.25% for 1 years (to 31/10/2018), then 3.75% for 1 years (to 31/10/2019), then 4.25% for 1 years (to 31/10/2020), then 4.75% for 1 years (to 31/10/2021) reverting to 5.35% (LIBOR + 4.75%). For purchases and remortgages. Early Repayment Charge: 5% of the amount being repaid until 31/10/2018, then 4% until 31/10/2020, then 3% until 31/10/2021 from drawdown. Overall Cost for Comparison: 5.2% APR. Loan to Value: 75% loan to value up to £500,000 loan amount. 70% loan to value up to £1,000,000 loan amount. 65% loan to value up to £2,000,000 loan amount. Lender Arrangement Fee: 2% added to loan. Broker Fee: A broker fee of £497 will apply (other fee options available). Repayment Options: Interest only or repayment. Rent to Interest Cover: 125% of the cost calculated at a rate of 5.00%. Minimum Income Required: £25,000 per annum.
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