The light refurbishment product for landlords from Suffolk Building Society will be based on the calculation on the property’s estimated rental income after the current work has been completed.
This will allow landlords to borrow more funds and the estimated rental amount will be provided by a third-party valuer and account for similar properties in size, location and condition.
The lender will give landlords six months to complete the renovation work on the property before it is advertised to let.
Landlords will need to evidence sufficient savings to cover the first six months of mortgage repayments, plans and costings for the planned work and capital to complete the refurbishment if this is not being financed by the mortgage.
The product is available for purchase or remortgage on a two-year discount deal at 5.89 per cent, a two-year fixed rate at 6.14 per cent or a five-year fixed rate at 5.79 per cent.
The maximum loan to value (LTV) is 80 per cent with the minimum loan coming to £75,000. The maximum loan is £1m and an application fee of £199 along with a completion fee of £999 applies.
The deal is only available to landlords with up to three buy-to-let properties, with a minimum income of £25,000, anticipated rental income to cover 145 per cent of the monthly mortgage payment stressed at the product rate at plus two per cent or a minimum rate of 5.5 per cent.
Properties that are uninhabitable at time of purchase, need structural work or need longer than six months to refurbish are ineligible.
Suffolk Building Society: ‘An alternative solution’
Andrew Sadler, key account manager, Suffolk Building Society said: “We’re delighted to provide an alternative solution to landlords who may have previously relied on bridging finance or second charge loans to make refurbishments.
“We’ve supported non-portfolio landlords for many years. What we can now offer is finance for light refurbishments. Affordability is based on the estimated future rental income on the newly-refurbished property, potentially boosting the maximum loan. The new products also go some way to improving the condition of private rental housing stock.
“In offering this mortgage, we will be drawing on the Society’s specialist manual underwriting capability which allows us to consider each mortgage application on its own merits.”
Zephyr Homeloans reduces rates
Zephyr Homeloans has cut rates across its two and five-year fixed rates by up to 0.55 per cent and 0.65 per cent respectively.
For properties with an EPC rating between A and C, its two-year fixed rate standard buy-to-let mortgage at 65 per cent LTV is 4.8 per cent and its five-year fixed rate is 5.3 per cent.
For properties with an EPC rating from D to E, its two-year fixed rate for a standard buy-to-let mortgage at 65 per cent LTV is 4.9 per cent and its five-year fixed rate at the same LTV tier is 5.4 per cent.
All come with a five per cent product fee.
Paul Fryers, managing director at Zephyr Homeloans, said: “With industry commentators signalling the potential end of the current cycle of base rate increases, we’re pleased to be able to reduce our product rates and provide more compelling and affordable deals for brokers to offer to their landlord customers.”
