BTL & HMO Mortgages
Single or multiple occupancy, purpose built or converted – we offer mortgages for a wide variety of residential investment property.
We also provide single loans to cover large property portfolios, including some or all units on a single freehold, or multiple properties in different locations.
For UK nationals living and working abroad, our expat mortgages could help your client purchase or refinance an investment property in the UK.
Is your client a portfolio landlord? You will need to use our portfolio submission platform, the BTL Hub. Find out more.
New Energy Efficiency Regulations were introduced on 1 April 2018. Click here for more information.
| Loan size | Rate | 65% LTV | 75% LTV | 85% LTV |
|---|---|---|---|---|
| £100,000+ | 3 month LIBOR + | 3.19% | 3.39% | 3.99%*† |
3 month LIBOR is currently 0.84%, and subject to a minimum rate of 0.75%
*maximum loan amount £1,000,000
†Maximum 75% LTV for HMOs with more than 8 rooms
Expat
If your client is a UK national living and working abroad, an additional 0.25% margin will apply, as will specific lending criteria. All other fees and product terms remain as standard.
Fixed Rates
Add to variable rate:
| 2 year fixed | Add 0.10% |
| 5 year fixed | Add 0.20% |
Rental Cover Requirements
The required interest coverage ratio (ICR) will depend on the property type and whether or not we are lending to a limited company.
ICR will be calculated using a stressed rate of 5.5%, or the initial pay rate + 1.55%, whichever is higher.
However, the following exceptions apply:
- if the case is a remortgage with no additional borrowing, ICR will be calculated using the initial pay rate + 1.05%, with no minimum stress rate.
- if the 5 year fixed rate is being used, ICR will be calculated using the initial pay rate, with no additional margin or minimum stress rate.
Standard Property
- Single dwellings
- HMO/multi/student lets with up to 5 rooms.
- Freehold blocks/titles of land with up to 4 residential units.
Personal Applicants
140% rental cover applies
Limited Company
125% rental cover applies
Specialist Property
- HMO/multi/student lets with 6 or more rooms
- Freehold blocks/titles of land with 5 or more residential units.
Personal Applicants
160% rental cover applies
Limited Company
145% rental cover applies
Product Details and Criteria
| Location | England and Wales |
|---|---|
| LTV | BTL & small HMO (8 rooms or less): Up to 85% Large HMO (more than 8 rooms): Up to 75% |
| Term | 2-30 years |
| Interest-only Option | Normal rates apply if I/O period is 10 years or less. If I/O period exceeds 10 years, 0.5% rate increase applies. |
| Interest Coverage Ratio (ICR) | 125% – 160% as shown above |
| Eligible Applicants | Individuals, limited companies, LLPs, partnerships, trusts and pension schemes. |
| Property Types | Houses, flats, blocks of flats, multiple units on one freehold, new-build (up to 75% LTV), converted during past 2 years (up to 70% LTV) are all acceptable. Multiple units must all be individually marketable and mortgageable for us to consider lending against the sum of individual values, otherwise lending may be based on the lower of vacant possession value (VP), investment value or purchase price. |
| Credit History | Good credit history is required – at least 2 years with no adverse credit |
| Interest Rate | Interest rate is margin plus LIBOR (3 month). 3 month LIBOR is currently 0.84%, and subject to a minimum rate of 0.75% If LIBOR reaches 3%, minimum LIBOR becomes 3%. The start rate is the lifetime floor rate for a loan. Discretionary rate increases may apply to complex cases, large HMOs generally 8 or more rooms, (including purpose-built student accommodation) or cases involving a high concentration of individual units in a particular location. |
| Fees | £130 administration fee is payable when the valuation is instructed, and is non refundable. 1.70% arrangement fee, payable on completion, can be added to the loan and is non refundable. Arrangement fee reduces by 0.25% for applicants with a clear 6 month InterBay payment history. Arrangement fee reduces by 0.50% for loans above £1m. Minimum fee (if combining discounts) is 1.20%. |
| Early Repayment Charge (ERC) | Variable: 3% years 1-5, then 1% for the life of the loan. Fixed: 4% year 1, 3% for remaining fixed period, then 1% for the life of the loan 10% of the balance can be repaid in any 12 month period, without notice and without incurring ERC. |
| Expat | UK nationals only. Limited company/LLP applicants acceptable. Minimum loan £125,000. Minimum UK equivalent income of £50,000. Employed applicants must work for a UK, EU, UK agency, or for a recognised and traceable company abroad. Self-employed applicants must be professional, such as an equity partner in a law firm, professional contractor or a business owner with an internationally recognised accountant. Self-employed applicants who only have a PO Box Address are not acceptable. Applicants must have at least two years of UK commercial property ownership experience. Applicants, including directors and shareholders of limited companies, must have a UK credit footprint, with a clean credit history for a minimum of three years. If an applicant resides in Australia or Monaco, the property must be held in a limited company. Applicants who live in Saudi Arabia, or who work/reside in any country on a banned or watch list, are not acceptable. Additional requirements may apply depending on the country of residence, and these will be made clear in any offer document. Mortgage payment must be by direct debit, in sterling from a UK bank. |
Related Case Studies
Fast turnaround on a large portfolio loan
The scenario
- A loan of over £18m was required for a portfolio of over 130 properties
- The application also involved the transition of a professional landlord’s portfolio into a corporate structure.
