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Buy to let mortgage lenders spring clean rates and criteria

A raft of lenders has revised their mortgage product offerings: reducing rates, amending loan to income criteria, withdrawing certain products and introducing new.

First up is Precise Mortgages, which has extended its house in multiple occupancy (HMO) criteria to include houses with eight bedrooms.

When the lender introduced its first HMO products last month, the limit was six bedrooms. They have also recently launched new limited company products, and have introduced specialist products for buy to let landlords in retirement.

Paragon Mortgages, which specialises in lending to limited companies for buy to let mortgages, is making its application process easier, and will now allow intermediaries to submit applications for limited company buy to let purchases online.

The lender currently calculates rental income cover at 125% x 5% for single self contained properties, and 130% x 7% for all HMO and multi-unit properties. It states that there is no differential product pricing for limited company applications.

It does stipulate, however, that Paragon must be the sole and exclusive lender for the complete term of the loan and that personal guarantees will be required from all directors and significant shareholders.

In addition, the limited company must be registered in England, Wales or Scotland and set up for the principal purpose of buying and letting residential property.

Natwest’s revised criteria meanwhile came into effect on the 24th February. The bank has lowered its loan to income (LTV) maximum on mortgages between 75.01% - 85% LTV to 4.45 times income (previously 4.75).

There is no change to loan to income maximums for mortgages of 75% LTV and below, or above 85% LTV and all applications submitted by close of business on Tuesday 23 February will be assessed on the current loan to income maximums.

Buy to let fixed rates have been reduced at intermediary-only lender, Accord Mortgages, and have been published as follows:

  •  Three year fixed rates at 65% LTV reduced by 0.20%
  •  Three year fixed rates at 75% LTV reduced by 0.25%
  •  Five year fixed rates at 65% LTV reduced by up to 0.25%
  •  Five year fixed rates at 75% LTV reduced by 0.30%

Early repayment charges apply to the above mortgages and are tiered as follows:

  Year 1 Year 2 Year 3 Year 4 Year 5
2 Year 2.0% 1.0%      
3 Year 3.0% 2.0% 1.0%    
5 Year 4.0% 4.0% 3.0% 2.0%  1.0%

TSB has also adjusted the rates on a range of its mortgages, with increases to its fixed and tracker products.

The bank’s three-year homemover fixed mortgage will see a rise of 0.10% on products with an LTV of 80-85% and 0.15% on homemover mortgages with an LTV of 75-80%.

In addition, it has adjusted the rates on its buy-to-let offering and remortgage ranges with both fixed and trackers increasing between 0.10% and 0.30%.

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