This discount mortgage comes with an initial rate of 7.19% which includes a 0.91% discount from our Standard Variable Rate for 5 years, followed by our Standard Variable Rate for the remainder of the term, currently 8.10%. The interest rate for this mortgage is ‘floored’, which means that while the rate may increase, it will never fall below 4.29% during the discount period.
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 discount period. This is different to a fixed rate product. The rate of interest is linked to the Society’s Standard Variable Rate (SVR) for mortgages. During the first 5 years, the interest rate charged will be 0.91% below the Society’s SVR – this is the discount period and rate.
The lowest interest rate you might pay during this period will be 4.29% 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 0.91%.
Three months before this product ends, we will contact you with the options available. If you do nothing at the end of the product period, you will move to the Society’s SVR which may mean your payments increase.
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 £150 fee payable for setting up this mortgage.
This product is available for loans of at least £25,000 and up to £1,000,000.
This product can only be taken if the existing mortgage has been active for at least 6 months.
This product can only be taken if the total amount of this new loan plus the amount owed on the existing mortgage does not exceed £1,500,000.
This product can only be taken if the purpose of the loan is to make improvements to the property.
This product is available for both Standard Buy to Let and Holiday Lets.
This loan will be assessed using projected rental income only.
If using a limited company, it must be a Special Purpose Vehicle Limited Company registered in England & Wales.
Who is this product designed for?
This product is designed for customers wanting a buy to let or holiday let mortgage in their personal name or through a limited company who:
want a further advance on their property.
have at least 25% 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.
want the option of exiting the product without any additional fees or overpay their monthly mortgage payment without restriction.
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.
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.
7.19% which includes a 0.91% discount from our Standard Variable Rate for 5 years, followed by our Standard Variable Rate for the remainder of the term, currently 8.10%. The interest rate for this mortgage is ‘floored’, which means that while the rate may increase, it will never fall below 4.29% during the discount period.
An arrangement fee of £150 applies to this product. 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.
75%
The maximum LTV stated refers to the total maximum LTV including the current outstanding mortgage.
Minimum £25,000 - Maximum £1,000,000
The maximum loan amount refers to the maximum further advance allowed. The total loan including the existing mortgage may not exceed £1,500,000.
35 years
For improvements to the property or another reason can be discussed with us by exception.
This further advance 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.
Capital & Interest or Interest-Only*
*Conditions apply, please speak to us.
None
The loan will be based on property rental, expenses, and the mortgage payment at a stressed interest rate.
Personal income cannot be taken into account to support a larger loan.
Available for Standard Buy to Let and Holiday Let.
Minimum property valuation £140,000.
Not permitted within 6 months of completion of the original mortgage. A valuation fee may be charged, and a credit and affordability assessment will be conducted.
No early repayment charges apply to this mortgage.
A mortgage of £130,152.00, payable over 15 years, on an interest-only repayment basis, with an initial payable rate of 7.19%, which includes a 0.91% discount from our Standard Variable Rate (SVR) for 5 years and then on our SVR, currently 8.10%, for the remaining 10 years. The initial term would require 60 monthly payments of £779.83, followed by 120 monthly payments of £878.53.
The total amount payable would be £283,225.40, made up of the loan amount (£130,152.00), plus interest (£152,213.40), Additional Borrowing Arrangement Fee (£150) and a Standard Valuation Fee (£710).
The overall cost for comparison is 8.00% APRC.
This is a worked example of repayments specifically relating to the further advance part only of the loan. 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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