The product is being marketed exclusively via Mortgageforce, Mortgage Next and Pink Home Loans.
Key product features include:
Interest rate: Up to 75% LTV BBR + 1.09% (initial pay rate 5.84% (APR 6.6)
Up to 85% LTV BBR + 1.24% (initial pay rate 5.99% (APR 6.7)
Rental income: Must cover 125% of the interest payment, calculated at the chosen pay rate.
Max advance: £300K to 85% LTV, £500K to 75% LTV
Arrangement fee: £385 (can be added to the loan)
Proc fee: 0.50%
Early repayment
charge: 3% in year 1, 2% in year 2, 1% in year 3. Then 1 month’s notice or 1 month’s interest thereafter
Availability: Interest only or repayment (or combination). Available to employed, self-employed & first time buyers. Clean credit status only.
Higher lending charge (MIG): None
Colin Snowdon, Managing Director of Freedom Finance’s mortgage lending operation, said: “The buy-to let market has proven its resilience, despite predictions that the bubble was about to burst. Rental yields do seem to have stabilised, but some borrowers find lower yields cause problems with borrowing limits. This product offers a combination of an accommodating rental calculation, along with very competitive interest rates which are linked to bank base rate. What’s more, there’s only a 3 year lock-in. We’re delighted to be launching this product via three leading distributors: Mortgage Force, Mortgage Next and Pink.”
The buy-to-let market is a key sector for Freedom Finance, which also has a range of self-certification, let-to-buy and non-conforming mortgages on offer. Freedom’s products have been carefully developed to address issues which most other lenders have left unanswered, such as restrictive income multiples, credit score based underwriting, inadequate LTV’s, MIG insurance being charged on prime mortgages and interest rates linked to LIBOR, which few borrowers understand.
