Buy-to-let 

The Mortgage Lender revamps fee structure

The Mortgage Lender revamps fee structure

The Mortgage Lender has introduced a three-tier fee structure to its buy-to-let range in an effort to help portfolio landlords navigate the demands of recent tax changes.

The completion fee structure, which is to be made available to the whole of market, includes fixed fees, a percentage fee and zero completion fee.

Fixed fees range from £1495 to £2495 for Houses in Multiple Occupation (HMO) and Multi-Unit Block (MUB) applicants and £995 to £1995 for individual and limited company borrowers.

The lender’s percentage fees range from 1.5 per cent to 2 per cent for individual, limited company and HMO and MUB borrowers.

The Mortgage Lender has also introduced an additional five-year fix for HMO and MUB borrowers at 70 per cent loan-to-value (LTV) and a rate of 3.82 per cent, with a £2495 completion fee.

Peter Beaumont, deputy chief executive at The Mortgage Lender, said the changes reflected a very competitive buy-to-let market.

He said: "It is important we give our introducers the widest choice possible to accommodate all types of borrower and their individual circumstances.

"The changes in taxation have made the structure of buy-to-let portfolios more complicated and our new range ensures that however a landlord is funding their properties we’ve got options that can help them plan their borrowing in the most cost-effective way for them."

The most recent figures from UK Finance show subdued lending in the buy-to-let market thought to be attributed to the tax and regulatory changes imposed on landlords in recent years. 

In April 2016 the government added a 3 percentage point stamp duty surcharge for private landlords and a year later phased in tax relief on mortgage interest for higher rate taxpayers.

Buy-to-let borrowers are also now subject to more stringent affordability testing under the Prudential Regulation Authority's tightened underwriting rules introduced in 2017.

Steve Olejnik, managing director at Mortgages for Business, said: "Whilst The Mortgage Lender have provided borrowers with a greater choice there are now nearly four times as many products to consider.

"Brokers will need to ensure they are recommending the right product taking into account the headline rate and the arrangement fee to ensure that the borrower is aware of the overall cost during the life of the product." 

rachel.addison@ft.com

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