The lender explained that “market volatility” in the UK had led to the highest mortgage rates for landlords for over a decade, and the savings boost would allow them to decrease the amount of interest they pay and lessen monthly costs.
Borrowers using this feature deposit sums into a linked overpayment facility, and then Molo Finance will reduce the balance from which interest is calculated according to the amount paid into the mortgage account.
Molo Finance said that it worked in a similar way to an offset mortgage but stressed it was not this type of product.
A spokesperson said that the main difference was that an offset mortgage involved the provision of a bank account but the savings booster was a “facility that the customer can transfer their savings to and then drawdown from”.
The firm added that interest fees were charged daily on the net balance of the mortgage loan and there were no early repayment charges.
Molo Finance added that customers could borrow back from the savings booster at any time and withdraw funds into their own bank account or pay a third party directly.
Francesca Carlesi, CEO and co-founder at Molo, said: “With interest rates at their highest for over a decade, landlords need more options for their buy-to-let mortgages. The private rental sector is an important part of the UK housing market, and hence landlords need lenders to be more innovative than ever.
“Molo is aware of the complex financing needs that landlords have, so we have gone beyond typical buy-to-let products to launch the Savings Booster, giving landlords true flexibility over their mortgage payments.”
Molo returned to buy-to-let lending in October, having secured a partnership with ColCap Financial earlier in the year.
Paragon launches five-year fixed rate with lowered reference rate
Paragon has brought out a five-year fixed rate buy-to-let mortgage up to 70 per cent loan to value (LTV) with an initial price of 5.69 per cent.
The product has an Interest Coverage Ratio (ICR) calculation rate of 5.75 per cent, which has been lowered form seven per cent. ICR rates have risen in recent weeks to around seven and eight per cent.
It is subject to a two per cent product fee and comes with a free mortgage valuation.
The product is available in England, Scotland and Wales and is suitable for portfolio landlord with four or more mortgaged properties. It is eligible for purchase and remortgage of houses in multiple occupation (HMO), multi-unit blocks (MUB) and single self-contained (SSC) properties.
Moray Hulme, director for mortgage sales at Paragon, said: “With a level of stability returning to the market we’re pleased to be able to offer a five-year fixed rate product that features a market-leading initial rate.
“We feel this will really appeal to those landlords who seek the certainty provided by fixed rates and should sit well alongside our discounted variable products, giving investors some choice.”
He added: “Listening to brokers, we know that landlords have still been keen to stay active in the market, particularly as tenant demand remains strong, so to help facilitate this we have reduced the rate at which we calculate ICRs from seven per cent to 5.75 per cent.”
The lender has been growing its buy-to-let range, with fixed rate deals aimed at portfolio landlords and additional two and five-year fixed rate deals.
