The company already offers a range of Buy-to-Let mortgages, which enable borrowers to invest in rental property, aiming to generate rental income and capital appreciation. The new "Buy or Let" mortgage expands this concept to include two additional types of lending:
fl Let to buy (renting out their current home and buying a new one to live in).
fl Purchase of additional properties (buying a second or third property for their own use as a UK holiday home, accommodation for relatives, or as a second residence).
A significant feature of this new product is the introduction of flexible features on the variable rate option, allowing borrowers to make overpayments and take payment holidays – a service that can be ideal for landlords.
If the property is let, borrowers can plough back any profit from the rental income into the property by making overpayments on the mortgage, thereby reducing its term and making substantial savings on future interest due.
Payment holidays come into their own when landlords are in the process of changing over tenants, or if they are experiencing any short-term periods when the property is empty. In these circumstances, the borrower can decide not to make a payment for up to three months.
‘Buy or Let’ mortgages are available over three self-certification products:
fl A discounted tracker variable rate at 4.99 per cent (6.1 per cent APR).
fl A 2-year fixed rate at 5.95 per cent (6.4 per cent APR).
fl A 5-year fixed rate at 6.15 per cent (6.5 per cent APR).
UCB Home Loans managing director, Charles Reed, said: "There has been a 66 per cent growth in the value of Buy-to-Let mortgages over the last year. Clearly, the property investment market is growing well and we are pleased to be able to offer our customers more choice through our new "Buy or Let" range. The new options provide borrowers with additional opportunities to invest in property, by allowing them to purchase for a number of reasons beyond those covered by conventional Buy-to-Let loans. Whilst opportunities still exist in this market it is always prudent for borrowers to look at property investment with a long-term view."
