It also implements new lending criteria
Specialist lender Hodge has reintroduced its five-year fixed rate products, launched a new two-year fixed rate product, and reduced the rate on its existing two-year fixed rate offering by 95 basis points (bps).
The new products, available from today, November 28, include a two-year fixed rate holiday let mortgage at 5.75% with a £1,995 product fee, a reduced two-year fixed rate of 6.05% (previously 7.00%) with a £995 fee, a five-year fixed rate product at 5.66% with a £1,995 fee, and another five-year option at 5.78% with a £995 fee.
The lender has also cut rates across its holiday let retention range by up to 83 basis points and adjusted stress rates for its holiday let products following tax changes introduced in the Spring Budget.
Stress rates for five-year holiday let products have been increased to a maximum of either the pay rate plus 2% or 5.5%, while stress rates for pound-for-pound remortgages have also risen to the same maximum. Stress rates for two-year fixed rate products remain unchanged, but the interest coverage ratio (ICR) has been lowered across all products, moving from 145% to 140%.
In addition to the rate changes, Hodge has implemented new lending criteria. Holiday let mortgage applications are now restricted to non-portfolio landlords — defined as property investors with three or fewer mortgaged properties, excluding their primary residence.
“It’s been nearly five years to the day since we launched our first holiday let product at Hodge, and a lot has happened in the holiday market in that time,” said James Enos (pictured), national account manager for Hodge. “The reintroduction of our popular two- and five-year fixed products and the rate reduction on our two-year product will give investors more options.
“Despite the difficulties the holiday let market has seen in recent years, it is still a popular investment option for many. Our products also allow investors to rent their holiday lets on Airbnb and stay at their properties for up to 90 days with no minimum income requirements, increasing their popularity.”
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