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  • Mortgages & Finance

    85% LTV Buy to Let Update

    85% LTV Buy to Let Mortgages are the highest LTV you can get as a property investor, this includes remortgages.

    In 2017 only one Buy-to-Let lender KRBS offered 85% LTV Mortgages, in 2018 they were joined by Kensington Mortgages and now in 2019 Vida Home Loans.

    Given the limited options for 85% LTV, you will typically not enjoy the higher mortgage rates. Though for many landlords it is useful in achieving an aim.

    The 85% LTV Remortgage offers landlords the ability to raise capital at the maximum mortgage from the property, to use funds in there property investment business elsewhere.

    The 85% LTV Purchase offers experienced landlords to invest in further buy-to-let properties with a small lump sum.

    They are offering the same products, in a personal name as well as a company buy-to-let.

    It's incredible to see some competition in the 85% LTV Buy to Let space, at last. With 80% LTV rates starting at 2.99% and this product at 4.49% there is still some price to pay for an extra 5% mortgage.

    Kensington4.29%2 Year Fix
    Vida4.49%2 Year Fix
    KRBS5.24%2 Year Fix
    Vida5.04%5 Year Fix
    Kensington4.99%5 Year Fix
    KRBS5.29%5 Year Fix

    NOTE 1: Correct as of 30/01/2019

    NOTE 2: The best rate may not be the best mortgage once we consider other areas, such as Arrangement Fees.

    Can I borrow up to 85% LTV of the Property Value?

    The affordability of a Buy-to-Let Mortgage is based on the rent that is achievable.  It can be difficult for landlords to reach a rental stress test of 85%.

    Completing the mortgage on a Five Year Fix and/or Limited Company may open up more options. A good Mortgage Adviser will be able to guide you in this.

    You can read our article on How is buy to let affordability assessed? 

    For illustrative purposes, only on a mortgage  of £170,000 with the Kensington Product you would require £974 rent and £1090 from KRBS.

    85% LTV Mortgage Criteria Highlights

    • Available for Houses in Multiple Occupation (HMOs)
    • Available for Multi-Unit Blocks.
    • Available for Limited Company Buy to Let.
    • Available for Trading Companies.
    • Available in England, Wales, Scotland and Northern Ireland.
    • No Minimum Income.
    • Interest Only or Repayment.
    • Minimum 1 Year Landlord Experience Required

    85% LTV Limited Company Mortgage

    The products available are for Personal Name or in a Limited Company Buy-to-Let if purchasing in a Special Purpose Vehicle (SPV). Trading Companies differ.

    85% LTV HMO Mortgage

    HMO Landlords can enjoy 85% LTV Mortgages. Lenders are expecting HMO Landlords to be the main utilisation of this product range, given the higher rents to pass the rental stress tests.

    Source: https://bespokefinance.info/insight/25-8...comparison

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    The above post is not financial advice, its often me rambling - passing time on a coffee break.
    If you are looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance.


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    This is great news .

    Confidence must be returning as this is just like the good ol days

    I was an 80% man and then discovered 85%

    with 60K you can buy 3 x 100K units rather than just 2

    So one of those  property`s rental  profits  and also its CG is in effect for free

    Just like the supermarkets  3 for the price of 2 deals

    The magic of leverage



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    Jonathan Clarke. http://www.buytoletmk.com

    Quite the contrary this is very risky lending to gain market share.Rumbles of 2007

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    There is a risk yes  as with all lending . This risk has been reduced though since 2007

    My last mortgage was over 6 years ago now so I`m out of touch so Adam will know more

    We now have  PRA though

    Much more DD on the applicant themselves enforced on the lenders by Gov

    So not every tom dick or harriett gets 85% in the way they may have done previously

    Its like Border control x 10 to get a mortgage these days anyway

    Rent multipliers up to 150% though gives the lenders a 50% safety net

    A 15% price crash is possible but on a 100K unit 15K is still  a decent safety net

    Even if you do get to zero equity for a few years your business is still viable over 20 years with the rental income

    I would be happy to have 100% LTV for myself and indeed have in the past

    Banks will potentially loan 50K to a random start up with just a business plan and little or no collateral

    So 85% against physical  bricks and mortar with an quantifiable income is perhaps less risky in many ways

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    Jonathan Clarke. http://www.buytoletmk.com


    Ref your sentence """Banks will potentially loan 50K to a random start up with just a business plan and little or no collateral"""

    In reality Banks will not lend a single penny to a random start up, if not with Director/Shareholder PG and fully collateralise (with "quality" collateral, i.e. cash, first charge on property etc).

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    Yes you are right .. As I wrote that I thought i was being rather too loose with my words


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    Jonathan Clarke. http://www.buytoletmk.com

    The magic of leverage indeed.

    I would not say "Confidence" is high if we consider rents not rising with RPI, london house prices stagnating (or falling) and the B word. I'd suggest confidence is in Limbo.

    My thoughts come to competition, their are a lot of lenders fighting for the prime vanilla buy-to-let business. This means challenger lenders often loosen criteria in the fringes to win business.
    Why we see more lenders entering LTD Co and HMO spaces and of-course higher LTVs like this.

    The supply of finance being high is certainly Good News for Landlord

    @Don Fump - It's certainly higher risk for the lender. They are gambling house prices wont fall by 15% in order to have there security safe. Though its not as "high risk" on the borrower as previously. Given the new PRA Rules on rental stress tests (no guarantee) rents should cover the mortgage payments. In addition all three lenders offering 85% LTV require the landlord to have prior experience (No First Time Landlord 85% LTV). They all also require some income to cover and stress test background portfolio.

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    _________________________________________________________________________


    The above post is not financial advice, its often me rambling - passing time on a coffee break.
    If you are looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance.


    _________________________________________________________________________


    High LTV mortgages returning?

    Now I know the crash is on it's way.

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    Here we go again risky lending again

    it might help The northern landlords who are close to negative equity since the 2007 crash

    if it was via ltd co it would help me with my landlord shuffle

    as the years move on

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Hmm? You can get 85% LTV in a LTD Co to do the Landlord Incorporation Shuffle.

    Whilst its a great product for those that need it, I wouldn't worry too much about risky lending.
    The PRA stress tests make it hard to reach 85% LTV so the rents achieved have to be very strong. They also check background portfolio stress tests and don't lend to First Time Landlords.

    If we consider First Time Buyers in Residential can buy at 95% LTV. Landlords at a good 10% LTV lower would not be of great concern. As we remember other banking reforms, requiring higher capitalisation at banks.

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    _________________________________________________________________________


    The above post is not financial advice, its often me rambling - passing time on a coffee break.
    If you are looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance.


    _________________________________________________________________________


    The one I’m looking at has a value of 75k and a rent of £450 pcm

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.