The Mansfield launches Family Buy to Let at 100% ICR
26 January 2018
Mansfield Building Society has introduced a new Family Buy to Let mortgage that enables landlords to let out their property to a close family member with an Interest Coverage Ratio (ICR) as low as 100%.
The Society’s product launch is in response to identified trends which show the growing number of parents buying property for their offspring to live in - as well as the growing number of people buying property for their parents to live in!
Unlike traditional Buy to Let products which have a typical ICR of 125% at 5.5% (or more), the Family Buy to Let from The Mansfield has been tailored for those landlords only wishing to charge close family members rent equal to their monthly mortgage payment.
With the housing market in a state of flux, the Society’s Family Buy to Let product enables landlords, with sustainable uncommitted earnings, to support relatives without having to charge rental income over and above the mortgage payment just to meet a lenders strict ICR calculations.
Landlords must have a minimum earned income of at least £20,000 with sufficient uncommitted income to support the ICR shortfall i.e. the difference between 100% ICR and 125% (basic rate tax payer) or 145% (higher rate tax payer) calculated at the product pay rate of 4.24%.
The criteria is available on a 3 year discounted variable rate and comes with the following features:
- Up to 75% LTV
- 4.24% pay rate (1.35% below SVR) for 3 years
- £199 application fee
- £1,800 completion fee
- Minimum loan £50,000
- Maximum loan £500,000
- 3% ERC for 3 years
Head of Products, Mike Taylor, said that the new BTL product highlights the Society’s strength in developing flexible solutions that meet real life challenges faced by the ever changing demography of the UK:
“By allowing uncommitted personal income to be taken into consideration, we believe that we’re providing a terrific option for landlords looking to purchase (or remortgage) a property to let out to parents, siblings or children.
We feel it’s important that, where uncommitted personal income is available, landlords should have the opportunity to choose a property that is appropriate for their family circumstances and needs without having to charge excessive rental payments purely to meet strict ICR calculations.
