Hinckley & Rugby Building Society introduces a new buy-to-let product at 4.99% targeting limited companies, leveraging top slicing to aid affordability during economic pressures.
- The new product features a five-year fixed rate and a maximum loan-to-value of 70%, addressing the needs of incorporated landlords.
- Top slicing allows landlords to use personal income to cover rental income shortfalls, assisting with mortgage affordability.
- The mortgage product includes a completion fee of 5%, designed for navigating the current high-interest environment.
- Laura Sneddon of Hinckley & Rugby highlights the product’s role in supporting both borrowers and lenders amid market challenges.
Hinckley & Rugby Building Society has launched a visionary buy-to-let mortgage product specifically crafted for limited companies, featuring a competitive rate of 4.99%. This offering is pertinent as it arrives amidst growing economic pressures affecting landlords, where rental income often falls short of covering mortgage affordability benchmarks. The product offers a five-year fixed rate, with a maximum loan-to-value (LTV) set at 70%. This approach underscores a strategic response to market demands, particularly for incorporated landlords.
Recognising the affordability challenges that many landlords face, the society introduces ‘top slicing’ as a flexible solution. Top slicing enables landlords to harness their personal disposable income to bridge gaps when rental incomes do not suffice, providing an alternative method to meet mortgage requirements. This mechanism allows for a more comprehensive evaluation of the landlord’s financial situation, encompassing earnings from other ventures, properties, or business interests, thus offering a more rounded assessment of affordability.
The newly developed product also incorporates a completion fee of 5%, reflecting the broader financial landscape characterised by elevated interest rates. This completion fee is indicative of the effort to tailor financial solutions that can better withstand these economic conditions, granting landlords a viable avenue to maintain their property investments.
Laura Sneddon, head of mortgage sales at Hinckley & Rugby, articulated the importance of this offering: “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.” Her statement highlights the dual benefit for both lenders and borrowers, forging a pathway towards stability in an unpredictable market environment.
The offering by Hinckley & Rugby Building Society emerges as a pivotal tool for landlords, combining innovative solutions to tackle the prevailing challenges in the buy-to-let market.
