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Foundation launches five-year buy-to-let fix with three-year ERCs – exclusive

  • 21/02/2019
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Foundation launches five-year buy-to-let fix with three-year ERCs – exclusive
Foundation Home Loans has launched a five-year fixed rate mortgage aimed at landlords allowing landlords flexibility to switch to another rate or lender before the full term completes.


The lender said cases can be underwritten as a five-year fixed-rate product, assessed on pay rate, but also provide landlord borrowers with shorter-term flexibility to exit the deal should they wish.

The Fix to Flex five-year mortgage is offered at a fixed rate of 3.45% for 65% loan to value (LTV) and 3.74% for 75% LTV, with a product fee of 1.75%.

However, it only has early repayment charges (ERCs) applicable for the first three years of the mortgage – charged at 5%, 4% and 3% respectively. Afterwards, the borrower would be able to remortgage to another product with no penalty.

It is available for individual, limited company, first-time and portfolio landlords.

Foundation’s standard interest cover ratio (ICR) and affordability criteria apply, and is part of its F1 buy-to-let range aimed at existing and new landlord clients with a predominantly clean credit history.


Opportunity to remortgage

Foundation Home Loans commercial director Andrew Ferguson said: “Having talked a lot to our intermediary partners, it became very clear that their landlord clients are looking for certainty in an uncertain economic environment.

“At the same time, no-one can be sure of what the mortgage market might look like in three, four, or five years’ time, and many landlords would effectively like the best of both worlds.

“That means they want a highly-competitive long-term fixed rate, but they also want the opportunity to remortgage and refinance should their circumstances’, or the market, change.”

Ferguson noted that part of the reason borrowers often do not like to fix for too many years is they fear being tied into deals, and having to pay significant charges, should they need to review their mortgage and change deals.

“This product provides a fully-workable solution for such concerns and we believe there is a clear demand for a mortgage which provides both certainty and flexibility,” he added.


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