Buy-to-let lenders ease borrowing restrictions

Buy-to-let mortgages are starting to return to borrowing limits last seen before the credit crunch.

Before the financial crisis, you could get a buy-to-let mortgage with a 10-15 per cent deposit. But once the credit clampdown started, lenders wanted at least a 25 per cent deposit, and some demanded far more.

While it's still difficult to get a new buy-to-let mortgage, there are an increasing number of lenders willing to dip their toes into the buy-to-let remortgage market.

property development

Revival: Lenders are returning to the buy-to-let remortgage market

Fee-free mortgage broker London & Country is offering a three-year fixed rate of 6.49 per cent, with a fee of £995 on a maximum loan-to-value of 80 per cent. The mortgage deal, which is being funded by the Saffron Building Society, means monthly repayments of £1,012 on a £150,000 repayment loan or £811 on an interest-only basis.

 

Other lenders are also becoming more welcoming towards buy-to-let borrowers. Nottingham Building Society has improved the loan-to-value up to 70 per cent on its buy-to-let mortgage for both remortgage and purchase.

It has also improved the rate - its three-year fixed rate is now 5.59 per cent compared with its previous rate of 5.89 per cent (which went to 65 per cent LTV). On a £150,000 home loan, that means monthly repayments of £699 interest-only or £929 repayment.

David Hollingsworth, of London & County, adds: 'We are seeing the first concerted push to wake up the buy-to-let mortgage market - particularly on lending criteria.'

Platform, part of Co- Op/Britannia, sliced up to 0.3 per cent off its buy-to-let fixed rates this week.

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