Foundation Home Loans has opened up its green mortgage products to landlords purchasing property.
The lender has launched three new two-year products for individuals and limited company F1 buy-to-let borrowers seeking to purchase a green property on variable discount rates, and with no early repayment charges, following demand for its green Reward remortgages for landlords and owner-occupiers.
The product pricing starts at 1.99% for properties with an energy efficiency rating of A, which is a discount of 3.1% for two years; for products with an energy efficiency rating of B, the current rate is 2.29% (a discount of 2.8%); and for properties with an energy efficiency rating of C, the current rate is 2.49% (a discount of 2.6%).
These new ‘green ABC’ purchase mortgages from Foundation are priced to reflect the increased benefit to the landlord based on the energy efficiency rating of the property – the better the EPC rating of the property being purchased, the greater the discount applied to the 5.09% reversion rate.
Each mortgage is available up to 75% LTV, comes with a 2% product fee and there are no early repayment charges. There is no limit to the background portfolio size of the borrower, subject to a maximum of £5m with Foundation.
Foundation also offers a ‘green Reward’ product for remortgages – a five-year fixed-rate buy-to-let mortgage for private rental sector properties which have an Energy Performance Certificate (EPC) rating of ‘C’ or above – dated within the last 12 months, except for listed properties which are not eligible. It is currently offered at 3.49% for 65% LTV and 3.59% for 75% LTV, with £750 cashback on completion plus a reduced fee of 0.75%.
George Gee (pictured), commercial director at Foundation Home Loans, said: “Up until now our ‘green’ products have only been for those landlords seeking to remortgage having improved the efficiency rating. Now, we are broadening this range by offering it to landlords when purchasing, and rewarding those who choose a more energy-efficient property. The better the EPC rating, the bigger the discount, and our aim is to help meet the needs of landlords who want a more energy-efficient property portfolio.
“Not only do these products have excellent rates, starting at 1.99%, but there are no ERCs which will allow landlords a larger degree of flexibility, plus will also allow them to improve the energy efficiencies of those properties further and benefit from the remortgage reward fixed rate options that are available.
“Foundation was one of the first specialist lenders to launch a green product offering and we are seeking to support landlords in securing the most energy-efficient properties possible.
“The government has itself set an ambitious target of net zero greenhouse gas emissions by 2050, and it’s widely thought that in order to do this we’ll need to eliminate energy inefficiencies from UK housing stock by 2030.”
