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Landbay introduces 25-year mortgages

  • 21/11/2017
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Landbay introduces 25-year mortgages
Landbay has extended its mortgage term offered to 25 years.

The buy-to-let lender previously only offered loans up to ten years long but said it had made the change following broker feedback and its growing experience.

The new terms are available to borrowers immediately, but Landbay said it did not expect investment in new loans to be affected until January 2018.

It said it expected an increase in the numbers of borrowers and that most borrowers would re-finance their mortgage after the initial period, so this change would not alter the expected average mortgage duration of three to five years.


Zero arrears

In July, Landbay celebrated its third anniversary since launch and confirmed all mortgages are secured on buy-to-let properties with an average loan-to-value of less than 70%.

Landbay CEO and co-founder John Goodall said: “We will now be offering 25-year terms on mortgages, bringing us in line with the vast majority of our competitors where 20 to 30-year terms are now the norm.

“We listen closely to the feedback from our broker partners and one of the things that is regularly mentioned is the need for longer term mortgages, so we suspect that demand for these deals will be high.

“The vast majority of borrowers will look to refinance after the initial period and so the increase is not expected to change our average loan duration. If a borrower does not refinance at the reversion date, they will move from the fixed-rate product to a tracker, at a rate that is no more than 0.5% higher than our standard tracker product.

“Our track record speaks for itself, with no defaults, arrears or even late payments to date,” he added.

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