In its bid to be the number one choice in mortgages for its customers the supermarket bank is reaching out to BTL buyers or those adding to their private investment.
The new products are designed for those looking to purchase or remortgage, with lending being made available to individuals who hold a maximum portfolio of three BTL mortgaged properties.
Sainsbury’s said this illustrates the importance the bank places on smaller investors.
Alongside its broker offering, Sainsbury's Bank said it would support smaller property investors with its launch of a consumer (BTL) product for accidental landlords.
The various products are available across two and five-year fixed terms, while lending is available up to £1m with a 60 per cent loan to value (LTV), and £500,000 up to 75 per cent LTV.
Cashback and free valuation are available with the offering.
The minimum loan amount available starts at £40,000, increasing to £1m with minimum terms starting at five years and rising to 40.
Applications are open from individuals and not limited companies. Those looking to apply need to have a minimum income of £20,000 excluding rental income.
Sainsbury’s Bank was historically part owned by HBoS, which later became Lloyds Banking Group.
From 1997 until 2004, it sold mortgages through its partner Bank of Scotland.
Sainsbury’s took full ownership of Sainsbury’s Bank in 2014 and in April 2017 the lender expanded into mortgages as part of "strategic priority" the lender said.
The supermarket group, which is currently seeking to buy Asda, owned by US giant Walmart, called the BTL unveiling a "key stage in its expansion" and said the move was driven by broker and consumer feedback.
Provider view:
David Buxton, head of banking at Sainsbury’s Bank, said: “We are delighted to introduce our BTL and consumer BTL products as we’re keen to begin to help smaller investors and non-portfolio landlords manage their mortgage outgoings.
“We work in partnership with our broker partners and they told us that a BTL range was important so we developed one as soon as we could, within our first year of trading. By creating strong partnerships, and listening to our brokers every step of the way, we’re continuing to build a strong mortgage proposition.”
Fees/charges:
There is either zero fee, £995 or £1,995 fee depending on the product choice.
Adviser view:
Dean Mason, director at Mason Financial Planning, said: “I've had a look through this proposition from Sainsbury's and the rates, fees and criteria look attractive. They have made it clear that they don't want portfolio landlords and limited companies and that's fine, these remain to a lesser or greater extent niche markets in the post--Prudential-Regulation-Authority changes landscape.
The key with buy-to-lets is the rental coverage they use, unless I'm missing something that is not stated here. Also landlords/landladies often need to act quickly and don't want to have to provide rafts of paperwork, so a slick and efficient process is essential.
Verdict:
If Sainsbury’s Bank can deliver a generous rental calculation and can deliver on what they have said they will do, brokers are likely to snap these up.
