Aldermore offers an 80% buy to let mortgage product – but is it any good?
Aldermore Bank is a relatively new lender whose main focus is on the professional landlords market of the buy to let sector. Like The Mortgage Works (previously reviewed) they do have an 80% buy to let product for purchases and remortgages which is targeted at experienced landlords.
The definition of an ‘experience landlord’ in their eyes is typically someone who can prove rental income for the last 6 months from a property which they own.
Aldermore also tries to attract landlords who operate in the middle to high loan end of the market by offering a flat fee of £1999 on some of its 80% buy to let mortgage products.
The loan sizes of up to £400,000 are available on its 80% buy to mortgage product which is higher than the £350,000 offered by The Mortgage Works, and means you could purchase a buy to let at £500,000 with a 20% deposit.
The lender allows ‘gifted deposits’ from family.
Recently the Aldermore Bank has changed their stance and now permits the arrangement fee to be added to the loan. Previously the arrangement fee was deducted from the advance, which was a real annoyance, and meant by definition that it was not a ‘true’ 80% buy to let mortgage product.
Example of current Aldermore 80% buy to let mortgages
Based on a purchase price of £200,000 and an interest only mortgage of £160,000.The costs quoted assume that the lender’s fee for arranging the mortgage are added to the loan.
There is a telegraphic transfer fee of £30 and a current sealing fee of £90 on full redemption. The main early repayment charges are 5% of the amount repaid in the first year and 4% in the second year. Overpayments of up to £5,000 can be made per annum during the first 2 years without the main early repayment charge applying.
Product 1: Percentage Arrangement Fee
Initial pay rate 4.48% (APR 5.9)
Valuation Fee £410 / Arrangement fee £4,000 (2.5% of £160,000 mortgage)
Fixed at £612.27 per month for 2 years. After this period the mortgage will revert to the lender’s variable rate at the time. Based on today’s prices this would be £783.10 per month.
Product 2: Flat Arrangement Fee
Initial pay rate 4.98% (APR 5.2)
Valuation Fee £410 / Arrangement fee £1999
Variable, currently at £669.62 per month for the term of the mortgage.
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For the full information on products and rates and fees please complete the enquiry form on the right-hand side of this page or alternatively call us on T: (020) 7993 2044.
Payam Azadi is a partner at Niche Advice Ltd who are Independent Financial and Mortgage Advisers in London.
DISCLAIMER
The views expressed in this article are based on my own personal general opinions and experiences, and they are not necessarily shared by Niche Advice Limited or other Mortgage Brokers. Rates correct as of 11/09/2013.
Author: Payam Azadi
Payam Azadi is a partner at Niche Advice who are whole of the market Independent Finance Brokers In London. His role is very much focused on Property financing both on residential and commercial lines.
You can call Payam on 020 7993 2044 or alternatively complete the enquiry form so he can personally get in touch with you.
Niche Advice is not tied to any bank, building society, estate agent or insurer and offers Independent Mortgage and Insurance advice.