Today, Foundation Home Loans is launching three and five-year fixed rate buy-to-let (BTL) products to expand its current BTL Prime deals.
The five-year fix uses a pay rate of 4.39% to measure rental yield, rather than the notional rate.
The new and updated products are as follows:
- Two-year fixed rate at 3.69%, down from 3.99% with an Early Repayment Charge (ERC) of 3%/2% and rental yield based on a notional rate of 5.25%.
- Three-year fixed rate at 3.89% with an ERC of 3%/2%/1% and rental yield based on a notional rate of 5.25%.
- Five-year fixed rate at 4.39% with an ERC of 5%/4%/3%/2%/1% and rental yield based on a pay rate of 4.39%.
- Variable rate at the London Interbank Offered Rate (LIBOR) +3.41% with an ERC of 3%/2% and rental yield based on a notional rate of 5.25%.
Paul Brett, Foundation’s Business Development Director, believes that the three and five-year fixes fill a significant gap in the market.
He explains: “We have reduced rates on products and also introduced a new three and five-year product, which our introducers had identified as an important addition we needed to make.
“By allowing the rental yield calculation of 4.39% rather than the notional rate, we believe this will allow more customers to benefit from our compelling lending proposition. I believe that introducers will be delighted by these changes, which will appeal to more landlords looking to lock into a longer term product.”1
1 http://www.propertyreporter.co.uk/finance/foundation-home-loans-launches-new-fixed-rates.html