If you are a landlord financing buy to let property with a limited company sourcing the right mortgage can be a challenge.
Although many landlords are considering moving to a corporate set-up, lenders will still consider mortgage affordability in the same way as if the borrower was an individual.
That means the 145% rate at 5.5% is the standard rent cover formula from January 1.
For landlords looking to refinance or purchase property, here are some of the current deals based on deposit amount rather than interest rates.
65% loan-to-value (LTV): At this LTV, lenders will look for a 35% deposit
- Kent Reliance – two-year variable discount of 3.34% and a fee of 1.5%
- National Counties Building Society – five-year fix at 3.29% with a fee of £1,495
- Metro Bank – five-year tracker at 3.24% with a 1.5% fee
- Paragon – two-year fix at 3.3% with a 1.5% fee
75% LTV: Landlords must find a 25% deposit
- Precise – two-year fix at 3.34% and a 2.5% fee
- Paragon – two-year fix at 3.45% and a 1.5% fee
- Kent Reliance – two-year variable discount of 3.54% with a 1.5% fee
80% LTV: Lenders require a 20% deposit
- Aldermore – a lifetime tracker at 4.28% with a 3% fee
- Precise – two-year tracker at 3.79% with a 1.5% fee
The number of lenders offering competitive company buy to let mortgages is restricted.
The main lenders are:
- Aldermore Bank
- Precise Mortgages
- Kent Reliance
- Metro Bank
Some high street banks and building societies will consider the loans for existing customers.
Several brokers offer company buy to let mortgages with an additional fee of around 1% of the loan amount on top of any charges made by the lender.
This could mean a fee of 3.5% on the Precise 75% LTV two-year fix. On an average home valued at £285,000 this would be £9,975 – plus legal charges, survey and other buying costs.