Hinckley & Rugby Building Society recently introduced a new mortgage option tailored for limited companies, featuring a 5-year fixed rate at 4.99%.
- This product addresses the affordability issues that landlords face due to high interest rates by allowing top slicing.
- A maximum loan-to-value of 70% is set, with an additional completion fee of 5%.
- The innovative approach considers the broader financial circumstances of landlords, including other income streams.
- Laura Sneddon highlights top slicing as a vital tool for navigating today’s challenging buy-to-let market.
Hinckley & Rugby Building Society has launched a buy-to-let mortgage product tailored specifically for limited companies, offering a 5-year fixed rate of 4.99%. This strategic move is designed to tackle the challenges landlords face amidst current high interest rates. By allowing top slicing, the product enables landlords to use personal disposable income to supplement rental income shortfalls, thus meeting the mortgage’s affordability criteria.
The new mortgage option comes with a maximum loan-to-value (LTV) of 70%, alongside a completion fee of 5%. The design of this provision is aimed at providing a financial solution for incorporated landlords who struggle with affordability due to economic pressures. This ensures that even if rental income does not meet the minimum requirements, landlords have an alternative means to bridge the gap.
A distinctive feature of this product is its consideration of the landlord’s overall financial standing. Hinckley & Rugby assesses income from other properties, investments, and business ventures to augment rental income, meeting necessary mortgage affordability conditions. This comprehensive approach attempts to provide landlords with a more flexible and secure financial footing.
Laura Sneddon, head of mortgage sales, emphasised the flexibility of top slicing in overcoming the hurdles of today’s buy-to-let market. She remarked, “Top-slicing is a flexible tool that helps incorporated landlords overcome the affordability hurdles presented by today’s challenging buy-to-let market. By factoring in a landlord’s overall income, we are providing a cushion that supports both the borrower and lender in feeling secure about the mortgage.”
Hinckley & Rugby’s innovative mortgage product may offer incorporated landlords a viable path through current economic challenges.
