Why consider a 7 or 10 year fixed rate for your specialist landlord client?
25th Oct 2023
Investing in property is increasingly a long-term ‘play’ and, as such, needs to be treated as such when it comes to the finance that is recommended.
Those who take this seriously have much longer time horizons when it comes to their investments, which no longer number merely single-digits. These are properties which landlords want to hold within portfolios for many, many years in order to extract the full value from their investment.
To aid that ambition, Foundation has just launched a new range of longer-term seven and 10-year fixed rates, only available to packagers like 3mc, specifically available within the F2 Extra range.
F2 Extra is for landlord borrowers who are seeking to finance a more specialist property type such as extra-large HMOs, semi-commercial property and holiday lets, and properties requiring large loans or portfolios over £5 million.
Grant Hendy, Director of Sales at Foundation comments: “This type of longer-term financing can be specifically relevant for landlords active in this specialist property space because it provides absolute certainty of monthly mortgage payment over a long-term, and thus it doesn’t leave the landlord subject to the potential short-term rate vagaries that tend to happen over a shorter period.
“Most landlords, particularly when it comes to professional players who are more active in the specialist property buy-to-let space, want to know exactly what they’ll be paying each month over a lengthier term. They tend to be involved in these sectors because they are looking for the healthier yield these properties tend to deliver, and ‘flattening out’ your mortgage costs at the same amount over a longer period, means you can hopefully grow that yield as, for example, rental demand improves and/or rents increase.
“Product options for the types of properties catered for by F2 Extra are more limited, which is why landlords may wish to lock in for longer when a suitable option is available. Over the last 12 months specifically, landlord borrowers have seen a fluctuating, and somewhat turbulent, interest rate landscape.
“Swap rates specifically have bounced around, sometimes at very short notice, and this has clearly had an impact on buy-to-let mortgage product pricing, the length of time for which products are available. That means the pricing works for a landlord one week, but might be gone the next.
“Given all those circumstances, it is perhaps not surprising that landlords tend to value certainty over a ‘maybe’ in terms of what will be available for them after 2 or 5 years. If they opt for a short-term fix or a tracker or discount.
“Long-term mortgage certainty for a long-term investment horizon could make much more sense for many landlord borrowers, especially when the properties are slightly outside the ‘norm’ of traditional buy-to-lets, so it is worth having the conversation with your landlord client.”
If you’d like to discuss the F2 extra range then please feel free to get in touch:
📱 0161 962 7800
*3mc for intermediaries only*