Published 21 June 2017 · Older article — see current rates
Borrow more on a buy to let mortgage with one of the best rental calculation products on the market
Which lender has the Best rental calculation for Buy to Let Mortgages? The answer is things change all the time but below is one of the best products currently on the Buy to Let Market to help with purchase and remortgages. As I have previously posted Buy to let mortgage products have had to become more inventive since the Prudential Regulation Authority (PRA) review in January this year, to make mortgages fit on rental calculations. Competition is fierce to win buy to let business as taxation changes have slowed the market, and products with the maximum rental calculations have become the battle ground.
Foundation Homeloans are latest Buy to Let Lender to press their foot down on the accelerator with the launch of a 3.29% five year fixed rate, with the rental coverage based on the pay rate to maximise gearing potential.
How does this pay out in practise? Well the market generally seems to be adopting 145% coverage based on a notional interest rate of 5.5% following the PRA’s findings, so below is an example of the difference:
Best rental calculation for buy to let mortgage
Borrowing potential Table
Rental per calendar month Typical market position
145% @ 5.50% Foundation Homeloans
145% @ 3.29% Additional borrowing potential
£500 £75,235 £125,775 £50,540
£750 £112,850 £188,650 £75,800
£1,000 £150,470 £251,550 £101,080
£1,500 £225,770 £377,315 £151,545
£2,000 £300,940 £503,100 £202,160
The rental further improves if the property is bought inside a limited company framework as the rental coverage factor drops to 125%.
Features / description: Lender applies a rental cover of 145% at the payrate to maximise your borrowing potential.
Niche Advice offers appropriate advice on buy to lets including ideas on how to get the maximum mortgage so if your looking at the Best rental calculation on buy to let mortgages please. For more information complete the Online form under our Contact section on this website or call T: 020 7993 2044.