Foundation Home Loans has launched a fee-free limited edition owner-occupier remortgage product, along with a limited edition buy-to-let (BTL) deal.

The remortgage product is available up to 75 per loan to value (LTV), with its two-year version priced at 3.19 per cent and its five-year pegged at 3.49 per cent.

It has a minimum loan size of £200,00 and is available on a capital and interest basis. It has no product or application fees and comes with a standard valuation.

The limited edition BTL products are also available up to 75 per cent LTV and are eligible for both purchase and remortgage. Individual and limited company landlords are eligible.

The two-year fixed rate is priced at 2.94 per cent, while its five-year fixed rate stands at 3.14 per cent. It has a flat fee of £1.995 and there is no minimum loan size.

George Gee, commercial director at Foundation Home Loans, said that borrower interest in products with lower upfront costs was growing, which was why it launched its remortgage product.

He added: “With highly competitive interest rates we believe these new limited editions will provide advisers with a set of options to fit a number of client demographics.

“The flat fee option for landlords also means these BTL limited editions are highly competitive on total cost and will interest landlords who specifically want larger loan amounts.”

The Mortgage Lender adds HMOs to limited edition BTL products

Elsewhere, The Mortgage Lender has added houses of multiple occupation (HMO) and multi-unit blocks (MUBs) products to its limited edition range.

The five-year fixed rate for HMOs and MUBs is available up to 75 per cent LTV and has an initial rate of 3.58 per cent.

The lender has also cut the rate for its limited edition five-year fixed rate aimed at individual and limited company borrowers to 3.2 per cent. This is a fall of 0.11 percentage points.

The completion fee for its limited edition range has fallen to one per cent, and all come with standard valuation fees and a £150 application fee.

Steve Griffiths, sales and product director at The Mortgage Lender, said: “Our limited edition BTL products are designed to make it easier for brokers and landlords to refinance and add to their portfolios.

“Adding HMO and MUB properties to the mix gives landlords looking to purchase or remortgage those buildings access to competitive five-year rates and reduced completion fees, bringing down the overall cost of refinancing or purchasing while allowing them to leverage by borrowing up to 75 per cent LTV.”

The product fee on all its two-year fixed rate mortgages has been halved to one per cent while the five-year fixed F1 and F2 standard property product fees have been reduced by 0.5 per cent to 1.5 per cent. 

Rate reductions include the five-year fixed homes in multiple occupancy (HMO) offering at 75 per cent loan to value (LTV). This has been cut to 3.44 per cent. 

The large HMO or multi-unit block (MBO) five-year fixed product at the same tier has been reduced to 3.54 per cent. The five-year fixed product for short-term let at 65 per cent LTV has gone down to 3.74 per cent. 

The lender has also released a short-term let product with a flat fee. 

This is a five-year fixed deal with a fee of £1,495. It is available at 65 per cent LTV at a rate of 3.94 per cent and 75 per cent LTV at 4.29 per cent.   

George Gee, commercial director at Foundation Home Loans, said: “We have been able to significantly reduce the product fees across our two and five-year fixed rates while maintaining, and in many cases even reducing, rates. This new buy-to-let product range with lower percentage product fees is designed to reduce the total cost of the loan for buy-to-let borrowers. 

“Due to the popularity of flat fees across the rest of our range we’ve also introduced a five-year fix which comes with a £1,495 fee for those purchasing or remortgaging short-term lets, again designed to keep down the overall cost of the loan.” 

Of course, there is still a partial saving to be made for those purchasers completing before the end of September. I suspect while some transactions would have been aborted as a result of not hitting the first deadline, others will be continuing with the intention of completing before the end of September. 

The decision to include landlord purchasers in the group who could benefit from the reduced stamp duty charge undoubtedly acted as a catalyst in terms of purchase activity in the last six to 12 months.  

Landlords still purchasing 

As a buy-to-let lender we certainly saw the results of this decision, however there is also plenty of evidence to suggest landlords are not going to pause purchasing just because the reduced stamp duty period is coming to an end.  

Far from it.  

Recent results from the latest BVA BDRC research amongst landlords reveals that, although the proportion of landlords intending to buy over the next 12 months has fallen from its four-year high of 19 per cent in the first quarter, it has only dropped slightly to 14 per cent.

And these 14 per cent who say they are intending to buy are looking to acquire an average of 1.9 properties each. 

You can see therefore that many landlords plan to continue their purchase activity, and there are certain regions in the country – namely the South East and South West – which, according to the research, are most likely to see purchases in the next year.  

Decision-driving trends 

This may indicate that landlords active in these regions are responding to two separate – but related – themes.  

Notably, a move out of larger cities to areas of the country which may provide more space and do not necessarily have to be within commutable distances, and secondly, if this is also a response to the growth in people wanting or having to holiday in this country, as a result of the measures currently in place. 

Certainly, landlords appear to want to add to portfolios on an ongoing basis, and they will need to take these sorts of demand-driving factors into account when it comes to purchasing the right property which can benefit from strong tenant demand, rental yield and eventually, capital growth.  

Portfolio landlords are tending to lead the way in this respect, especially those who may prefer a shorter fixed-term or are looking to borrow against a specialist property type.  

We tend to hear a lot from portfolio landlords about their focus on keeping upfront costs to a minimum, so products with ‘no fee’ options or free standard valuations are seeming to be the main preference. 

Sector professionalisation 

Overall, we also continue to see the move towards the use of limited companies by portfolio landlords.  

In the BVA BDRC research, the number of landlords intending to purchase their next property within a limited company vehicle grew to 51 per cent, up four per cent on the first quarter, and for those who own 11-plus properties that number rises to 67 per cent.  

Overall, 16 per cent of all landlords have at least one property held within a limited company and for those landlords that do have at least one in this structure, 66 per cent of their portfolio is held like this. This is up from 48 per cent a year ago.  

It is clear the professionalisation of buy-to-let continues apace and both advisers and lenders will need to keep on adapting and responding to it. 

According to research from the BVA BDRC, which surveyed 753 consumer and portfolio landlords, around 30 per cent want to remortgage in the next 12 months, and within that a third are doing so to release equity from their portfolios.

Portfolio landlords, those who have four or more buy to let (BTL) mortgages, are twice as likely to want to remortgage in the next 12 months against consumer landlords, with 43 per cent planning to do so.

Foundation Home Loans suggested that this released equity would probably be invested in further purchases and noted that portfolio landlords were more optimistic about the lettings market than other landlords.

Average portfolio values in the second quarter this year came to £2.04m, and the first time it has gone above £2m since the third quarter of last year.

Foundation Homes Loan’s commercial director George Gee (pictured) said double-digit house price growth over the past year had consequently heightened the desire to remortgage.

He said: “It means advisers are likely to see a growing spike in BTL remortgage advice demand, and the positive news is there are very competitive product options for all types of portfolio landlords at present.”

Gee added that the lender was working on its portfolio landlord offering, examining price and upfront costs.

He added: “Portfolio landlords are likely to grow in number in the months and years ahead, and as specialist lenders in this space, we will continue to develop the product options and flexible criteria to help them get the most out of their existing properties to expand their letting footprint.”

The product is part of its F1 range and priced at 3.39 per cent. It is available up to 75 per cent loan to value (LTV) and comes with one free standard valuation. It is available for purchases and remortgages.  

Individual and limited company portfolio landlords are eligible for the mortgage and the maximum loan size is £750,000. 

The rental cover requirement is calculated at payrate and stress tested at 125 per cent for limited companies, and 145 per cent for other borrowers. 

There is no limit to the portfolio size, but it is subject to a maximum value of £5m with Foundation. 

The lender said borrowers were likely to face fewer checks if they gave details of all properties in their portfolio from the outset of the application process.

George Gee, commercial director at Foundation Home Loans, said: “When it comes to portfolio landlords, whether they are refinancing existing properties or adding additional ones, a major consideration is keeping their upfront costs to a minimum. 

“Our recent research, in partnership with BVA BDRC, revealed that even with the passing of the stamp duty holiday, a sizeable number of landlord borrowers still intend to add to their portfolios over the coming year, with the average number of properties they intend to buy close to two.  

He added: “Portfolio landlord borrowers are also more inclined to use limited company vehicles, and it’s therefore important we continue to offer a range of products which cater for these needs.” 

Rates for the products now start from 0.6 per cent.

“We know that cost is always a consideration for borrowers, so we are continually reviewing our offering to ensure that we can continue to deliver the most competitive rates alongside the most impressive service,” said Jonathan Rubins, director at Alternative Bridging.

The rate reduction comes after the lender added a light and heavy refurbishment range for residential and commercial property. It also introduced a 90 per cent loan to cost loan for medium sized residential development earlier this year and has partnered with Nivo to speed up applications.

“We’ve got nearly 30 years in property lending and we know what it takes to deliver the right solution for a client, with cases that are individually underwritten by a team of experts, and a short line of command so decisions can be made simply and swiftly,” Rubins added.

Foundation Home Loans adds no-fee product for portfolio landlords

Foundation Home Loans has brought out a pair of limited edition two-year fixed rate no-fee products to 75 per cent LTV for portfolio landlords.

One of the products will be part of the lender’s core buy-to-let (BTL) range. It offers rates starting from 3.24 per cent, with the maximum loan size £750,000.

The other product has a rate of 3.44 per cent and is for standard houses of multiple occupancy, defined by the lender as having up to six occupants.

Both products are available for purchase and remortgage to individuals and limited company borrowers.

The rental cover requirement is set at a notional rate of 5.5 per cent. The stress test is 125 per cent for limited companies and basic rate taxpayers, and 145 per cent for all others.

Foundation Home Loans’ commercial director George Gee, said: “We are experiencing sustained activity across the BTL marketplace. These limited edition products provide further options for those portfolio landlords who may prefer a shorter fixed term or are looking to finance a specialist property type.”

He added that upfront costs could be a real problem for landlords, especially for those wanting a competitive rate, and said that the no-fee products would provide greater flexibility.

The products are limited edition and have no product fee, no application fee and come with one standard valuation.

The first product is available at 3.24 per cent with a maximum loan of £750,000 and is part of the lender’s core F1 range.

The second product has a rate of 3.44 per cent, and also has a maximum loan size of £750,000, and is aimed at landlords borrowing against standard houses of multiple occupancy (HMO) of up to six occupants.

They are both available for purchase and remortgage, while individuals and limited companies are eligible.

The rental cover requirement is at a notional rate of 5.5 per cent and is stress tested for 125 per cent for limited companies and basic rate taxpayers, and 145 per cent for all other borrowers.

Foundation Home Loans commercial director George Gee (pictured) said the products would give portfolio landlords more options, especially if they wanted a shorter fixed term or wanted to finance a specific property type.

He added: “Upfront costs can prove a real issue for some landlords who are looking to secure a competitive rate and can offer especially good value to those purchasing or remortgaging multiple properties.

“By introducing these no-fee products – which include one free standard valuation, no product fee and no application fee – we are aiming to deliver a product range which offers portfolio landlords access to greater flexibility.”

The Mortgage Works brings in limited company products and cuts rates

The Mortgage Works has brought in a two-year and five-year fixed rate limited company mortgages, with free legal incentives, to minimise upfront costs.

Both products have a rate of 3.39 per cent and are available up to 75 per cent LTV. They are both subject to a £1,995 fee.

The products come with free standard valuations and The Mortgage Works will appoint the conveyancer, cover the professional fee and standard disbursements.

The lender has also cut rates for five-year fixes with the limited company option up to 75 per cent LTV going from 3.59 to 3.09 per cent. It has a fee of £1,995 and free standard valuation.

Its BTL remortgage up to 65 per cent LTV has been cut by 0.3 per cent, with rates now starting from 1.59 per cent.

The rates for the lender’s BTL remortgage up to 75 per cent LTV have decreased by 0.4 per cent with rates starting from 1.79 per cent.

Both the remortgage products have a two per cent fee and free valuation and legals.

The Mortgage Works head, Daniel Clinton, said: “There are a number of costs to consider when investing in a BTL property, particularly for incorporated landlords where conveyancing fees can be higher.

“Our new purchase products with free standard legal and valuation fees aim to help minimise upfront costs.

Athene offers retirement savings annuities and is an affiliate of asset manager Apollo Global Management.

The insurer’s investment into Foundation Home Loans’ mortgages will be managed by Apollo. 

The transaction is subject to regulatory approvals. 

George Gee (pictured), commercial director at Foundation Home Loans, said: “Foundation Home Loans is pleased to announce the new ownership, which will allow us to continue to pursue our growth plans and further support our partners in the intermediary mortgage market.   

“The access to Athene’s balance sheet will greatly strengthen and diversify Foundation Home Loans’ sources for funding its lending, providing intermediary partners with even greater confidence in the solutions we offer to their clients.” 

The product has a rate of 3.19 per cent and is available up to 75 per cent loan to value (LTV). It has a maximum loan size of £1m.

Individual landlords, limited companies and portfolio landlords are eligible for the product, which has a reduced product fee of one per cent and £500 cashback on completion.

There is no cap on background portfolio size of the borrowers, although Foundation does impose a maximum of £3m on most cases.

The ICR for the product is 125 per cent for limited companies and basic-rate taxpayers, and 145 per cent for others.

Foundation Home Loans commercial director George Gee (pictured) said: “Five years ago there was a popularity shift from two to five-year fixed rates, and we anticipate that to continue for upcoming mortgage transactions in 2021.

“Remortgage activity has been subdued during the pandemic to date but we are seeing an increasing number of landlord borrowers seeking to utilise their existing property portfolio in order to release equity to fund future purchases.”

He said that the product would support landlord looking for a competitive pay rate and rental calculation for five years, with reduced upfront costs.

Paragon brings in four products aimed at portfolio landlords

BTL specialist Paragon has introduced four 75 per cent LTV products, which are available for both purchase and remortgage, with rates starting from 2.75 per cent.

The products are available for personal and limited company borrowing and include a pair of two-year fixed products and two five-year fixed products.

This includes a two-year fixed at 75 per cent LTV for single self-contained (SSC) units which has a rate of 2.75 per cent.

A two-year fixed at 75 per cent LTV for houses in multiple occupations (HMO) will have an initial rate of 2.85 per cent.

The lender has also brought in a five-year fixed for SSC and HMO properties, which has a rate of 3.1 per cent and 3.34 per cent respectively.

The two-year fixed products have a product fee of one per cent, whilst the five-year fixed products have a product fee of two per cent. All products have free valuations and £750 cashback.

Paragon Bank’s director of mortgage sales, Moray Hulme, said: “With the stamp duty holiday tapering down at the end of the month, landlords will be looking for competitive rates as they seek to add new property to their portfolio.

“We are confident these limited-edition rates will be popular with our portfolio landlord customers seeking to purchase new properties or remortgaging existing deals.”

In its F1 range it has cut the rate on its five-year fixed deal at 90 per cent LTV with no product fee by 0.2 per cent to 4.19 per cent.

The rate for its five-year deal at 65 per cent LTV, with a £995 fee, has been cut by 0.15 per cent to 3.24 per cent.

In its F1 range the two-year discount product with no early repayment charges is now available for 85 per cent LTV borrowers, with a rate of 3.89 per cent.

The lender has also cut its Green Reward Remortgage products in its F1 range by up to 50 basis points, with the rate for its two-year fix at 75 per cent LTV now standing at 3.19 per cent.

The products have a £750 cashback inventive and reduced product fees for properties with an Energy Performance Certificate of C or above.

Fixed and variable rates in its F2 range have been cut with its five-year fixed at 80 per cent LTV has been cut from 4.59 per cent to 3.89 per cent.

The lender has also released two and five-year fee-assisted fixes in its F2 range, which goes up to 85 per cent LTV and has a fee of £595 fee. They are available for purchase and remortgage borrowers and come with a free valuation and no application fee.

For its F3 range the lender has brought in a new two-year fix at 80 per cent LTV with a 4.29 per cent rate, and a five-year fix at 4.49 per cent.

Foundation Home Loans commercial director George Gee (pictured) said: “We anticipate there will be a growing number of potential first-time buyers coming to market looking for specialist residential products and this is a range which now fully caters for that borrower demographic.

“A major focus for Foundation this year is our specialist residential offering and we believe this refreshed range offers a considerable amount of competition for advisers and a wealth of product options for those borrowers who have a range of specialist needs such as multiple or complex income streams, are self-employed, or who have historical credit issues,” he added.