This discount mortgage comes with an initial rate of 6.90% which includes a 1.20% discount from our Standard Variable Rate, currently 8.10%, for the term of the mortgage. The interest rate for this mortgage is ‘floored’, which means that while the rate may increase, it will never fall below 4.00%.
What are the key features of this product?
This is a variable rate mortgage product which means monthly payments can go up or down during the term of the mortgage. This is different to a fixed rate product. The rate of interest is linked to the Society’s Standard Variable Rate (SVR) for mortgages. For the term of the mortgage, the interest rate charged will be 1.20% below the Society’s SVR – this is the discount rate.
The lowest interest rate you might pay during this period will be 4.00% which is called the “floored” rate. This means that if the Society’s SVR is below 5.20% at any time during the period of the product, you will not benefit from the full rate of discount of 1.20%.
This product is available on:
A Capital & Interest repayment basis. This means your monthly repayments will contribute to paying back the initial loan as well as the monthly interest on the remaining balance. Over time, this will mean the amount owed will reduce and the interest will also reduce.
An Interest-Only repayment basis. This means that your monthly repayments will only pay back the interest on your initial loan amount. The capital balance will not reduce. You will need to agree with us up front, a suitable method of repaying the initial loan at the end of the mortgage term.
This product is available for properties in England and Wales.
There is a £1,499 fee payable for setting up this mortgage.
This product is available for loans of at least £200,000 and up to £1,000,000.
This loan will be assessed using projected rental income only.
The product requires the company to be a Special Purpose Vehicle Limited Company registered in England & Wales.
The product requires the borrower to have no more than 8 properties in their existing portfolio.
Who is this product designed for?
This product is designed for customers wanting a holiday let mortgage through a limited company who:
are looking to purchase or remortgage a property.
have at least a 25% deposit/equity in their property.
have surplus monthly income to manage their finances if the Society’s SVR goes up which would mean an increase to the monthly repayment amount.
do not intend to make overpayments of more than 10% in any of the first 3 years.
Who is this product NOT intended for?
This product is not intended for customers who:
want or need the certainty of a fixed monthly repayment for the term of the product.
plan to repay more than 10% of the loan in any year within the first 3 years as this will result in a charge.
Does this product deliver "fair value" for customers?
Being a mutual building society, all our products are priced to balance the needs of our Member savers and borrowers and the Society’s operating costs to support the Society’s long-term future.
We support our mortgage customers by providing each applicant with a bespoke, personal, and individual approach. We largely deal with people whose circumstances do not fit into the standard requirements of automated decision-making processes used by larger lenders.
We believe this product represents fair value for the customers it was designed for considering the customer support provided before, during and after the application.
Initial Rate
6.90% which includes a 1.20% discount from our Standard Variable Rate, currently 8.10%, for the remainder of the product term.
The interest rate for this mortgage is ‘floored’, which means that while the rate may increase, it will never fall below 4.00%.
Fee Details
£1,499 – This can be added to the loan on completion; however, this will result in interest being charged on it making the overall fee greater over the term of the mortgage.
Maximum LTV
75%
Loan Size
Minimum £200,000 - Maximum £1,000,000
Maximum Mortgage Term
35 years
Portability
This mortgage product is portable to a new buy to let mortgage on a different property when the new mortgage is taken out simultaneously with the repayment of the existing mortgage. You would need to meet our credit and affordability requirements for the new mortgage, the new property would need to be acceptable to us, and approval of a new mortgage would be subject to our prevailing Lending Policy.
Repayment Method
Capital & Interest or Interest-Only*
*Conditions apply, please speak to us.
Incentives
None
Restrictions
The loan will be based on property rental, expenses, and the mortgage payment at a stressed interest rate.
Top Slicing cannot be considered to top up the loan.
The company must be a Special Purpose Vehicle Limited Company registered in England & Wales for the purpose of owning residential property for rental. It must be owned by individual shareholders, where the Shareholders, Directors, and controller(s) are UK based individuals. Other criteria relating to the Ltd Co also applies. An unsecured personal guarantee is routinely required from each Shareholder and Director.
Lending restricted to England and Wales.
This product is available for purchases and remortgages.
Minimum property value of £267,000 is required.
Maximum portfolio size of 8.
Early Repayment Charge Details
A full or partial capital repayment, which exceeds 10% of the capital balance amount in any one year during the discount period, will attract an early repayment charge of:
3% in the 1st year
2% in the 2nd year
2% in the 3rd year
Representative Example
A mortgage of £254,436.00, payable over 20 years, on an interest-only repayment basis, with a discounted rate of 6.90%, which includes a 1.20% discount from our Standard Variable Rate (SVR), currently 8.10%, for the term of the mortgage. The term would require 240 monthly payments of £1,463.01.
The total amount payable would be £607,842.40, made up of the loan amount (£254,436.00), plus interest (£351,122.40), Arrangement Fee (£1,499), Standard Valuation Fee (£365), Solicitor Fee (£250), Funds Transfer Fee (£15), and a Mortgage Exit Fee (£155).
The overall cost for comparison is 7.20% APRC.
This information may not be representative of your personal circumstances and your payments may differ from this. Representative data as of 1st January 2023.
If you haven’t registered with us already, please register online before submitting business with us. Once registered with us, you can register to our broker online services.
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Obtain a DIP before submitting an application. Attach an affordability calculator to your submission and we'll give you an initial decision based on the information provided.
DECISION IN PRINCIPLE
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