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Multitude of rate cuts highlight BTL product competition – Ying Tan

by: Ying Tan, founder and chief executive of Dynamo
  • 26/10/2020
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Multitude of rate cuts highlight BTL product competition – Ying Tan
The autumn leaves are changing colour and starting to fall, if only the frequency of rate changes across the buy-to-let (BTL) and specialist markets would drop as quickly.


Of course, I’m being a little facetious here as lenders continue to battle some challenging economic conditions. In reality, we can’t really grumble from a product perspective.

While the early weeks of October did not produce much in the way of product-related activity, the second half of the month more than made up for this and – spoiler alert – this piece will contain some lowering of rates.


Foundation and Landbay

October kicked off with Foundation Home Loans relaunching its five-year buy-to-let fixed rate product with three years of early repayment charges (ERCs).

This comes with an interest cover ratio (ICR) based on the pay rate, available at 125 per cent for limited company and basic-rate taxpayer borrowers and 145 per cent for others – there is a maximum loan amount of £1m.

Staying with specialist lenders, Landbay has refreshed its core product range, including the lowering of some rates.

Five-year fixed rates now start at 3.49 per cent, previously 3.54 per cent, while its standard two-year fixed rates now start at 3.19 per cent, down from 3.39 per cent.

Landbay has also expanded its range by introducing 70 per cent LTV products while keeping rates the same as they were at 60 per cent LTV.


Zephyr and Precise

Zephyr Homeloans has lowered rates on its standard and specialist BTL products.

Zephyr’s new rates start at 3.14 per cent for a two-year fixed-rate standard property BTL mortgage and at 3.44 per cent for a standard five-year fixed-rate loan.

It has reduced rates on standard properties, houses in multiple occupancy (HMOs) and multi-unit blocks, offering up to 75 per cent loan-to-value, with a 70 per cent LTV on a £1.5m maximum loan and 75 per cent LTV with a £1m maximum loan.

Precise Mortgages has updated its range of BTL mortgages with limited edition specials and a return of its credit impaired products.

For its limited edition specials, the lender has reduced fees on its tier one range to 1.25 per cent. Rates start at 3.14 per cent and are available at up to 70 per cent LTV – with limited company and personal ownership structures accepted.


Barclays and NatWest

Focusing on the more mainstream lending propositions, Barclays has introduced 12 BTL products at either 60 per cent or 70 per cent LTV and varying maximum loan sizes.

The new additions include a two-year fix at 60 per cent LTV with no fee for purchase and remortgage loans up to £1m at 2.39 per cent, with a five-year version at 2.45 per cent.

In a highly positive move, the lender has also returned to the portfolio landlord market which it left in July.

NatWest has spoiled the lowering rate fun – again my tongue is firmly in my cheek here – by increasing rates across its BTL range by up to 70 basis points.

Notable product increases within the lender’s core BTL range include the 75 per cent LTV two-year fixed rate remortgage offering, which has been increased from 3.07 per cent to 3.77 per cent.


Return to holiday let

In terms of other BTL product areas, it’s good to see Hanley Economic Building Society back in the ex-pat buy-to-let market with the reintroduction of its 3.49 per cent variable discount product at a maximum 80 per cent LTV.

This has an application fee of £299 and a product fee of £500. The minimum loan size is £30,000, with a maximum loan size of £500,000.

And that’s a wrap for October, although I fully expect to see more product-related fireworks in November.


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