Saffron Building Society has upped the maximum loan to value for buy-to-let from 75% to 80% – but the arrangement fee could make borrowers wince.
The lender this week launched two buy-to-let mortgages available up to 80% LTV. Both are only available through mortgage brokers TBMC.
Saffron is offering a two-year fix (fixed until January 31, 2014) at a rate of 5.49% with a 2.5% fee, and a two-year discount product at a rate of 4.99%, which is a 0.4% reduction on its standard variable rate. However, the arrangement fee is an eye-watering £2,995.
A remortgage deal is also available for both products which comes with refunded valuations and free legal fees.
Andy Young, chief executive officer at TBMC, said: “This is excellent news for the buy-to-let sector and hopefully it will pave the way for other lenders to increase their maximum LTVs for buy-to-let lending.”
Comments
This really shouldn't make many people wince - not if you offset the £3K fee from the HUGE savings available at the moment in the property market. £150,000 property which you can get for about £110,000 - who cares about a £3K fee if it gets the deal done?
Put it this way, if another £3000 gets the mortgage upto 85%, I will queue all night in the pouring rain to sign up for another mortgage or two.
If the fee is added to the mortgage as opposed to an upfront fee, this is not likely to be too much of an issue even for cash strapped landlords - especially on larger properties where the fee will become an acceptably small part of the total.
eg: BTL purchase of £380,000 flat in London becoming a £383,000 mortgage probably isn't going to upset anyone too much.
Admittedly on a much smaller mortgage - £45,000 one bed flat in SomeTown - then that becoming £48,000 *IS* more of an issue.
In any event, on an interest only mortgage at 5%, the fee will amount to £12.50 a month. I can live with that if it gets another property in the bag while prices are so cheap.
85% BTL should be on the horizon soon I guess - albeit with a fee to pay.