As we have previously reported, rental growth has increased exponentially in the past year, and we believe that now is a better time than any to consider purchasing or remortgaging a buy to let. As these figures look increasingly more encouraging daily, more lenders are starting to turn their heads and listen to what we the consumers and intermediaries want. MetroBank have today announced that they will be changing their BTL loan to values to 80%, up from their previous limit of 75%.
Although it doesn’t seem like a huge jump compared to other lender criteria changes, we have seen this year, a 5% change makes a huge difference in both the amount of deposit you would need to put down to purchase a buy to let property and interest rates and monthly repayments. To put these figures in to perspective, if you were looking at buying a £200,000 investment property, previously with MetroBank and other lenders, you would need to put down a minimum of £50,000 deposit but with the new criteria kicking in, this can potentially be reduced by £10,000 to £40,000 which to some could be the difference between being able to buy the ideal property or having to settle for 2nd best.
Another appealing feature that this change brings in is the interest rates becoming available. With all higher loan to value products the interest rates are ramped up however the new 80% rates for Metro are being offered at 3.29% for a 5-year fixed product which is competitive, and 75% products remain between 2.39% and 2.89%.
Senior mortgage and protection advisor at Oportfolio Jade Pinkerton is excited by the news coming out of MetroBank as she has a lot of BTL clients who were previously struggling with their deposits: “This news is really a good step in the right direction for MetroBank. As most BTL lenders still cap at 75% LTV for purchases and remortgages I think Metro will be a figurehead in leading the way back to pre-covid lending. Of course, the rental income expected, and mortgage affordability still has to match up to the loan size needed but it is interesting to see more options coming to the market for potential landlords.”
Charles Morley, Director of Mortgage Distribution at Metro Bank, also comments: “In a competitive market, it’s important that customers and intermediaries have plenty of options available for their individual requirements. We’re confident that these enhancements to our BTL range, along with our ongoing push into more specialist mortgages, make Metro Bank an attractive option for an ever-wider breadth of mortgage customer.”
If you or someone you know wants to discuss a possible buy to let purchase or remortgage then please feel free to give our experienced advisors a call on 02088771169.