Landlords can either reduce monthly payments or the length of the mortgage term with the linked account, while money can be freely withdrawn from the savings account at any time.
Family Building Society has today launched an offset buy-to-let mortgage – where a savingsaccount is attached to the mortgage.
Landlords can either reduce monthly payments or the length of the mortgage term with the linked account, while money can be freely withdrawn from the savings account any time.
The mortgage is a 2-year discount at 2.99% with a £999 product fee to 65% loan-to-value for individual landlords.
After the two years it will revert to the lender’s residential investment managed mortgage rate (standard variable equivalent) of 5.29%.
Borrowers can take out the offset buy-to-let mortgage on a capital repayment or interest-only basis; although with the latter option borrowers can only reduce the monthly mortgage payments and not the term length.
Themortgagewas launched with one eye on the upcoming buy-to-let tax changes, as from April buy-to-let borrowers will only be able to offset three quarters of their mortgage finance.
Keith Barber (pictured), director of business development at Family Building Society, said: “We can’t negate the tax changes.
“But we can help you make a better use of your savings to help you maximise your cashflow.”
Barber reckoned portfolio landlords who don’t want to set up a limited company structure could utilise the product.
He added: “The product focuses on people with existing buy-to-let properties who want to make better use of their personal savings.
“Savings earn relatively little compared to mortgage interest and with our product when they need to get their hands on the cash they can straight away.
“It’s more flexible and that can be helpful if they’re looking to buy another property or carry out building work."
He also envisaged the product helping the retired withbuy-to-let property and savings to their name, as well as the self-employed who need to keep cash in reserve to spend on their tax bill which they could put in the offset account.
Like Family Building Society’s residential offset mortgage the buy-to-let product allows family and friends to chip in with their own savings accounts to reduce the term or cost.
The mortgage borrower must hold a linked savings account with a balance of £100 though up to four accounts can be linked to the mortgage.
Offset buy-to-let mortgages are niche, with Clydesdale Bank being one otherlender offering the product.
