There is a selection of banks and building societies providing £1 million+ buy-to-let mortgages at incredibly low rates.
Fleet Mortgages is the latest lender to ease its buy-to-let maximum loan size and will provide £2 million mortgages for single loans up to 75% loan-to-value. This reduces to £1 million up to 80% loan-to-value.
How cheap are buy-to-let rates at the moment?
NatWest for Intermediaries is offering one of the cheapest two-year fixed rate buy-to-let mortgages. It is priced at 1.53%, has a £995 arrangement fee and the maximum loan size is £2 million.
After the fixed-rate period, the mortgage reverts to the lenders 4.74% standard variable rate and the APRC is 4.7%.
Aaron Strutt, product director at Trinity Financial, says: “The margin between the cheapest residential and buy-to-let mortgages has reduced recently. The lowest buy-to-let is 0.27% more expensive than the cheapest two-year residential fixed-rate and the gap rises to 0.34% for five-year fixed rates.”
The Mortgage Works maximum loan size is £1.5m and Santander’s maximum loan size is £750,000.
NatWest for Intermediaries, Metro Bank and Barclays for Intermediaries all have a maximum loan size of £2 million.
To access the most competitively priced buy-to-let mortgage rates landlords will typically require a 40% deposit.
Larger buy-to-let mortgages are available if you have a 25% deposit.
Buy-to-let mortgage lenders use a range of calculations to work out how much you can borrow.
A typical rental calculation for buy-to-let purchases is 140 at 5.5% - so if a property generates £1,500 a month the maximum loan size would be around £233,766.
If you are remortgaging a buy-to-let property, Trinity Financial has access to lender with a rental calculation of 130 at 4%. With £1,500 a month rental income the maximum loan size would be £346,153.
Some lenders can use an applicant’s personal income as well as the rent to provide larger mortgage loans. This is useful for landlords when their property does not enough rent to qualify for a sufficient mortgage.
Trinity Financial has access to a host of banks including Barclays for Intermediaries and Metro Bank to secure more generous mortgages for those with larger incomes.
The banks use ‘top-slicing’ to assess personal incomes along with the rent to boost the loan sizes. The application has a larger chance of going through if you have lower credit commitments and monthly outgoings.