Surely I am not the only landlord worried about new EPC requirements?9:44 AM, 17th February 2021
About A week ago 125
Let to buy mortgage lenders are inflicting stinging interest rates on reluctant landlords who have to rent out their homes to move.
Brokers and lenders say they are handling more applications from homeowners who are desperate to move because of personal or work commitments.
Reluctant landlords have a choice – either asking their lender for a ‘consent to let’ or remortgaging under a let to buy deal that gives them the funds as a deposit for another property.
Lenders granting consent to let tend to hike up the mortgage rate and charge a fee for switching the loan.
Many charge a higher rate than buy to let as they regard let to buy as a higher risk because the homeowner is not a professional landlord.
Platform, the buy to let arm of the Co-Op Bank, recently disclosed one in four mortgage applications are for let to buy loans.
The cheapest £150,000 let to buy mortgage from Platform is at 4.99% fixed for two years costing £699 per month interest only, while the Co-Op offers two-year fixed rate deals to borrowers living in their own homes at 3.29% – costing £311 per month.
Nationwide gives consent to let for £50 and after three months hikes interest rates from the standard rate of 2.5% to 4% – making payments jump by £188 from £312 to £500 per month on a £150,000 loan.
Lenders argue that renting out a home injects more risk into borrowing than when a buyer lives in the property – and that this is reflected in higher interest rates and fees.
Meanwhile, the Darlington Building Society is offering two new buy-to-let deals fixed at 3.99% until May 31, 2015 with fees of £774 up to 60% loan to value for interest-only borrowers and 70% LTV for capital repayment mortgages.
Applications are restricted to landlords with no more than three letting properties.
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