The top-up buy to let mortgage is a new loan for landlords with an innovative repayment plan.
Castle Trust, an independent lender, has introduced the mortgage to sit alongside a standard buy to let loan.
Instead of paying interest, the loan is repaid at the end of the term and a slice of any growth in the property value is added.
Castle Trust will lend up to 20% of the investment property value over a maximum 10 year term, but the top-up is only allowed to take maximum borrowing including any first charge mortgage up to 85% loan to value.
Lending is further restricted between a minimum of £10,000 and a maximum of £400,000.
Arrangement fees of around £500 are also charged.
As an example, a landlord borrows £25,000 against a home worth £140,000 over 10 years. The final repayment is £35,714.
Another independent lender with a new buy to let mortgage deal is InterBay Commercial.
The firm is offering up to 85% loan to value mortgages on a rent stress test of 110%, compared to 125% applied by most mainstream lenders.
The current rate is a 6.1% LIBOR tracker at LIBOR plus 5.35%.
The maximum loan is £1 million.
The lender charges a 2% arrangement fee – and 3% if the loan is less than £75,000.
Besides buy to lets, the lender will advance funds on houses in multiple occupation...
(HMOs) and new flats at a maximum LTV of 75%.
The deal is not open to first time landlords.
Santander is paying a £250 cashback and a free valuation to landlords remortgaging buy to lets.
Managing director Brad Fordham said: “The buy to let market remains a key focus for us as we move into 2014 and this latest improvement, offering a free valuation and £250 cashback to non-professional landlords when remortgaging, demonstrates our continued commitment to this sector.”
All the above buy to let mortgages are only available through brokers.©LandlordZONE® – legal content applies to England and is not a definitive statement of the law, always seek professional advice. If you have questions on these issues go to the LandlordZONE® Forums