The products take account of a property’s potential rental income rather than the applicant’s income. The three-year flexible Base Rate tracker is at Bank Base Rate (BBR) plus 0.99 per cent in years one to three, currently 5.49 per cent. From year four it reverts to BBR plus 1.49 per cent, currently 5.99 per cent. The arrangement fee of £495 can be added to the loan.
The three-year flexible fixed rate is 5.39 per cent until 29 Nov-ember 2008, reverting to BBR plus 1.49. The arrangement fee of £695 can be added to the loan.
Overpayments are allowed up to a maximum of 10 per cent of the loan value paid annually without penalty. ERCs are payable at 4 per cent in year one, 3 per cent in year two and 2 per cent in year three. The maximum LTV available is 75 per cent.
Tony Burdin, head of retail strategy at the Scarborough, said: “This is a welcome development for people who may not have sufficient personal income to support significant loans on their main and second homes.”
Ray Boulger, senior technical manager at John Charcol, said: “Most lenders do not cater for holiday home BTL. To have a lender tailor a product specifically for this market with respectable rates and sensible underwriting criteria is a great addition to the BTL market.”
Barbara Goldsmith, managing director of Stratford Properties, commented: “The rates are about average, although the arrangement fee on the fixed rate is quite high. 75 per cent LTV is certainly sensible lending. Can the applicant be self-employed and, if so, can they self-certify? If this is the case then this is quite a good deal.”
