Santander Joins Buy to Let Mortgage Frenzy

by Property118.com News Team

16:26 PM, 12th December 2011
About 8 years ago

Santander Joins Buy to Let Mortgage Frenzy

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Santander Joins Buy to Let Mortgage Frenzy

Santander has joined the buy to let lending frenzy with a range of purchase and remortgage deals for landlords.

The property investment loans are available from IFAs and mortgage brokers under the Abbey for Intermediaries banner.

The launch pitches Santander among around 65 buy to let lenders offering loans across the UK.

Rates include two-year fixes at 4.29% at 60% loan to value and at 5.19% up to 75% loan to value. Santander charges a £1,495 fee on both – but also offers a free valuation and a £250 cash back on completion.

Santander is targeting new landlords with one or two letting properties rather than professional investors with multi-property portfolios.

To qualify, borrowers have to meet tight lending criteria, including:

  • Aged between 21 and 70 years old
  • Couples or partners must have at least one employed borrower who earns at least £25,000 a year gross before bonus or commission
  • Borrowers must have a mortgage on their home and no more than three loans secured against their home, including the mortgage

Other criteria include:

  • No more than two buy to let homes with Santander and no shared homes – Houses in multiple occupation (HMOs) are excluded
  • Maximum loan-to-value is 75% and properties must be worth at least £100,000 – which makes the minimum loan £75,000
  • Rent cover is 125% worked out on an interest only repayment

Phil Cliff, director of retail assets for Abbey for Intermediaries, said: “The buy to let market has seen strong growth throughout 2011 as demand for quality rented accommodation in the private sector continues to rise.

“Interest rates remain low and rental yields are at their highest level for some time. We are delighted to be able to support the intermediary market with the launch of our buy to let offering for non-professional landlords.

“The range is designed to meet the needs of new or small volume landlords adding a first or second buy to let investment property, and we expect to see strong interest from intermediaries and their clients.”



Comments

0:17 AM, 13th December 2011
About 8 years ago

What will happen if the EU regulation is introduced in 2013 preventing BTL mortgages or remortgages being obtained on rental income criteria.
I can't belive that this bank is unaware of this regulation.
Surely they wouldn't risk so much if there was a risk to their loans.
I suppose it is OK if the loans continue on at an affordable rate but if not the landlord is stuffed.

Ian Ringrose

13:15 PM, 15th December 2011
About 8 years ago

What do these revert to after the two-year fixes?

Is this just another case of getting people in before putting the margins up?

Mark Alexander

13:45 PM, 15th December 2011
About 8 years ago

Sorry Ian, I don't have any more detail but I have posted on a variety of mortgage intermediary websites inviting them to comment further and answer questions.

17:12 PM, 20th December 2011
About 8 years ago

Personally I think that the buy to let mortgage rates, like most rates, are all really high anyway, especially when you consider that the Bank of England base rate is just 0.5%. There is a shortage of money at the moment so rates are much higher over base rate than they were before the credit crunch. If things improve over the coming years then there should be some much better deals available at the end of the 2 year fixed rate. At the end of the period most deal involve going onto the lenders variable rate, which will vary according to Bank of England base rates and competition from other lenders.

Mark Alexander

17:20 PM, 20th December 2011
About 8 years ago

Interesting comment. What do you think of lenders SVR's (standard variable rates) which are not lined to bank base rate or LIBOR. Personally they worry me. I've heard that some banks charge a difference of 2% on their own standard variable rates based on their assessement of LTV (Loan to Value). If values fall to a point where a property can't be remortgaged after a fixed rate then signing up to an SVR reversion rate as opposed to a bank base or LIBOR rate tracker seems very risky. What do you advise?

Ian Ringrose

21:50 PM, 20th December 2011
About 8 years ago

That’s a risk I refused to take, so we revert to a very good lifetime base rate tracker with the Woolwich, our advisor did not like it, as he is unlikely to every get a fee for a remortgage given how good the lifetime term tracker rate is. This cost us more over the first 2 years of the mortgage.


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