Several lenders that provide buy-to-let commercial mortgages have changed their rules in favour of borrowers, noted the Residential Landlords Association in its January 2018 update of the buy-to-let market.
Many lenders have lowered their interest rate for short-term fixed rate loans. The lowest two-year fixed rate mortgage interest rate is 1.39%, and this rate is available for both new purchases and remortgaging. Free valuations up to a value of £700 are available, but the highest loan-to-value rate on these mortgages is 50%.
New affordability rules mean that portfolio landlords with more than four properties need to show that they will receive rents that more than cover the mortgage repayments, Some lenders are insisting that rents should cover at least 145% of the mortgage repayments. However, it is possible to get much better deals of 125%. Some lenders are also including free valuations in their portfolio deals.
For British citizens living outside of the UK, a number of lenders are now offering mortgages for ex-pats, with rates starting at 4.18%.
A number of landlords are attracted to houses of multiple occupancies (HMO) as they can charge higher rents than for one occupier. Some lenders are offering fixed rate loans at 3.29% for HMOs. In some cases, loans of up to £10m are available.
In a competitive commercial mortgage market, lenders are launching new products or changing their terms regularly. To keep up with all the changes, and to find the best deals, a commercial mortgage broker is essential.