The new product's rate starts at 5.79%
Suffolk Building Society has rolled out new mortgage products tailored for private landlords embarking on property refurbishments, such as upgrading bathrooms or kitchens.
A new light refurb mortgage is available for both purchase and remortgage, offering a two-year discount deal at 5.89% (SVR minus 2.80%), a two-year fixed deal at 6.14%, or a five-year fixed deal at 5.79%.
All three options have a maximum loan-to-value (LTV) of 80%, a minimum loan size of £75,000, a maximum loan size of £1 million, an application fee of £199, and a completion fee of £999.
The newly launched light refurb mortgage will base the rental calculation on the property’s projected rental income post-renovation, rather than its existing rental value. This approach, the lender stressed, opens up the possibility for landlords to secure additional funds. The estimated rental amount will be determined by a third-party valuer, factoring in properties of similar size, location, and condition.
Landlords taking up this mortgage will have a six-month window to complete their renovation projects before listing the property for rent. Applicants are required to demonstrate adequate savings to cover the initial six months of mortgage repayments (in the absence of a tenant, detailed plans and costings for the planned refurbishments, and sufficient capital to fund the renovations, if not covered by the mortgage.
The deals can be found through the mutual’s Mortgage Product Finder tool, along with further details on each product.
The lender’s standard buy-to-let criteria apply, which means that the products cater exclusively to landlords owning up to three BTL properties, with a minimum income of £25,000. The anticipated rental income must cover 145% of the monthly mortgage payment, stressed at the product rate plus 2%, or a minimum rate of 5.5%.
“We’re delighted to provide an alternative solution to landlords who may have previously relied on bridging finance or second charge loans to make refurbishments,” Andrew Sadler (pictured), key account manager at Suffolk Building Society, said.
“We’ve supported non-portfolio landlords for many years. What we can now offer is finance for light refurbishments. Affordability is based on the estimated future rental income on the newly refurbished property, potentially boosting the maximum loan. The new products also go some way to improving the condition of private rental housing stock.”
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