Landbay has launched a range of five-year fixed rate buy-to-let products with variable fee options which will help cater for challenging rental calculations.
The recent rise in mortgage rates across the whole of the industry leaves some buy-to-let borrowers, particularly those remortgaging, unable to meet the interest cover ratio (ICR) requirements stipulated by the Prudential Regulatory Authority.
In order to help these borrowers meet the ICR, Landbay’s new range comes with a variety of product fee options, which enables the lender to offer lower interest rates.
The new range consists of three standard five-year fixed rate products up to 75% LTV starting at 6.49%.
Catering for small HMOs/MUFBs of up to 6 beds/units, Landbay’s five-year fixed rate starts at 6.99%, while large HMOs/MUFBs, for up to 12 beds/units, start at 7.09%.
This new range will sit alongside Landbay’s existing one and two fixed-rate products and tracker mortgages.
Paul Brett, managing director, intermediaries at Landbay, explained: “The mortgage industry is having to get used to a new, higher interest rate environment, moving from a 13-year era of historically low rates. Rental property is a vital part of the housing mix in the UK, we will continue to work hard to find solutions that mean people can still borrow for this reason.
“Although fees are now higher it means that we can keep rates lower and landlord borrowers are in a better position to meet ICR requirements. If we keep fees lower and raise interest rates, monthly payments would work out similar but in many cases landlords would not meet the ICR unless they increase their tenants’ rent.”
“Our new mortgage products are very competitive featuring high up on sourcing systems and we continue to look at ways to bring innovative products to market.”