The mortgage lender is offering a two-year tracker mortgage for both individual and limited company HMOs at a rate of 3.29%, 2.91% above Libor, reverting to 5%.
It is available on loans from £25,001 to £500,000 and has a maximum loan-to-value of 75%. The arrangement fee is £1,995 and the rental calculation will be based on 125% of the higher of the pay rate or revert rate.
Precise managing director Alan Cleary said that it was not clear how the HMO mortgage market will develop in light of changes to the tax and underwriting rules for buy to let (BTL).
Cleary said Precise is happy to offer the lower rate on this specific tranche of business as 3mc is a key distributor with expertise in this area. It follows the launch of fixed-rate HMO products by Precise and 3mc in August.
“We don’t have a crystal ball but are putting products out across different areas so that customers and brokers can choose,” he added. “We’re delighted to be launching this new HMO deal exclusively through 3mc. Both individual investors and those buying through a limited company can benefit.”
The deal is available to intermediaries directly, through 3mc’s network partners The Right Mortgage and Protection Network, Sesame, Stonebridge Network, Home Loan Partnership and to directly authorised members of the PMS Mortgage Club. It follows recent launches by other lenders in this area.
Doug Hall, director of 3mc, said: “We have seen an increase in interest in both individual HMOs and limited company BTLs as investors seek higher yields. I therefore have no doubt that this new product, which has a 125% rental cover calculation and which sits alongside a two-year fixed rate launched in the summer, will prove to be popular with brokers and their clients.”