Mortgages  

Fleet Mortgages unveils BTL limited company loans

Fleet Mortgages unveils BTL limited company loans

Fleet Mortgages, a buy-to-let (BTL) and specialist lender, has launched a trio of limited company products for borrowers using a corporate structure to purchase or remortgage.

The deals, available to 65 per cent loan-to-value, include a pay rate lifetime tracker at 4 per cent with a rental calculation of 125 per cent at 4 per cent. This product is only available to customers deemed by the lender to have a good credit score.

The second of the deals is a two-year fix at 3.40 per cent with a rental calculation of 125 per cent at 5 per cent.

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Lastly, the five-year fix is priced at 3.79 per cent with rent again calculated at 125 per cent at 5 per cent.

A 1.5 per cent applies to each product. The early repayment charges (ERC) for the fixed rate products are 5 per cent until the end of the fixed period. For the lifetime tracker option, the ERC is 3 per cent for three years.

Advisers are being urged to be proactive given the impact the Prudential Regulation Authority (PRA) new underwriting changes may have on their BTL clients, the lender said. 

The lender recently announced a number of criteria changes including a reduction in the minimum valuation on converted freehold properties outside London and the South East, down to £100k from £150k.

This had been £150k for all regions and it remains at this figure for London and the South East.

Provider view

Bob Young, chief executive officer of Fleet Mortgages, said: “It is vitally important that advisers look at all the available options for those clients who are going to be impacted" by the changes afoot for the sector.

“To that end, and given the increasing popularity of limited company BTL, we have launched three new products in our range for borrowers utilising the advantages of a corporate structure. 

“Advisers will note that we are offering one of these products at pay rate 125 per cent at 4 per cent, while the rest are offered with a rental calculation of 125 per cent at 5 per cent. Given the move in rental stress testing in much of the market we believe these products should be incredibly attractive right now, plus they come at highly competitive rates.

Adviser view

James Carter, principal at London based Independent James, said: “There is conflicting advice from different accountants about limited company products. Some say it is not worth going down this route because it is quite restrictive. A heavy double taxation applies to those who want to come out of a limited company.”

“This is a real growth area. A few years ago, there were only a few lenders offering loans to limited companies. Now rates on these products are more in tune with what is currently offered on BTLs.”

Charges

1.5 per cent.

Verdict

The limited company BTL mortgage marketplace is burgeoning and offers a great opportunity for brokers who have been hit by slowdown in the conventional BTL space.