Foundation Home Loans has introduced a new ‘Fix to Flex’ five-year, buy-to-let deal aimed at those landlords who want rate certainty plus the flexibility to potentially switch to another rate/lender before the full five-year term.
The five-year mortgage is offered at a fixed rate of 3.45% for 65% LTV and 3.74% for 75% LTV but only has early repayment charges (ERCs) applicable for the first three years of the mortgage – charged at 5%, 4% and 3% respectively, with a product fee of 1.75%.
After this period, the borrower would be able to remortgage to another product without having to pay any ERCs.
The ‘Fix to Flex’ product is suitable for individual, limited company, first-time and portfolio landlords.
The lender says cases can be underwritten as a five-year fixed-rate product, assessed on pay rate, but also provide landlord borrowers with shorter-term (three-year) flexibility to exit the deal should they wish to do so.
Foundation’s standard ICR and affordability criteria apply with this new product, and it is part of its F1 buy-to-let range which is aimed at existing and new landlord clients with a predominantly clean credit history.
Andrew Ferguson, commercial director at Foundation Home Loans, said: “Having talked a lot to our intermediary partners, it became very clear that their landlord clients are looking for certainty in an uncertain economic environment. At the same time, no-one can be sure of what the mortgage market might look like in three/four/five years’ time, and many landlords would effectively like the best of both worlds. That means they want a highly-competitive long-term fixed rate, but they also want the opportunity to remortgage and refinance should their circumstances’, or the market, change.
“With this ‘Fix to Flex’ product we can provide just that. Whether they’re an individual, purchasing or remortgaging through a limited company, a first-time or portfolio landlord, this product ensures that – after three years – advisers’ clients will not have to pay an ERC should they wish to seek an exit whilst ensuring they know exactly what they’re going to be paying every month during that period.
“Part of the reason why landlords’ – or indeed any borrower – often don’t like to fix for too many years is they fear being tied into deals, and having to pay significant charges, should they need to review their mortgage and change deals. This product provides a fully-workable solution for such concerns and we believe there is a clear demand for a mortgage which provides both certainty and flexibility. We’d urge advisers to contact the sales team at Foundation to see how this deal might be suitable for clients and we’ll continue to work with our partners to ensure they have a buy-to-let product range which meets their client’s needs and requirements.”