Private Finance's Mortgage Memo - 8th June 2022
is our take on what is currently happening in the mortgage market. Our views
are often cited in several national publications, including; BBC News, The
Times, Telegraph, City AM, FT Adviser and Daily Mail, as well as a number of
key trade publications, so this should keep you ahead of the curve. If you have
any questions on any of these stories, or would like further information,
please do not hesitate to get in touch.
- 85% LTV on BTL could open doors for landlords
- The mortgage that pays for itself
85% LTV on BTL could open doors for landlords
This week Keystone announced they will lend up to 85% loan-to-value (LTV) on their 2-, 5- and 7-year standard BTL range. The 85% BTL is a rather underserved section of the BTL market, typically lenders require a larger deposit. This product is across both their ltd company and their personal name range which is great for portfolio landlords.
- While the rates are high for this LTV amount, if someone has a very high yielding property it could make sense financially. Likewise, the additional gearing could potentially increase future return on investments elsewhere and provide more opportunities for investors to diversify their investment portfolios.
- With BTL investors facing growing barriers to the market and tougher tax treatments over the last few years, the option to purchase a property initially at a higher LTV and then work to pay down the property quickly may open a few doors for some landlords who require a high LTV for acquisition.
- BTL investors should be viewing their property investments with a long-term view, especially in cases such as this if they are having to take on more debt at higher rates to yield the same return on their investment.
The mortgage that pays for itself
In uncertain and volatile times, good debt advice is essential to your financial planning in a holistic view. Seeking the advice of mortgage advisers and wealth managers could save clients thousands in interest and tax payments. Many of our clients have been looking for methods to reduce their monthly outgoings or to have more flexibility with their cash flow. Offset mortgages can provide a wide range of benefits which are normally unknown and rarely promoted.
- With an offset mortgage, the money you have in a linked savings account is offset against the mortgage. The key benefits include tax and interest payment savings, as well as allowing instant access to cash at times when unexpected costs arise.
- With more house buyers opting to pay cash with no mortgage, it would be wise for these buyers to consider their alternative options before acting hastily and chase after a property they want. An offset mortgage could allow these buyers to buy the property while also having access to the cash when required.
- For those going through retirement planning, offset mortgage can remove any cash flows issues and allow there to be more control as to when assets are liquidised. Thus, reducing the risk of crystallising your cash at a point in time when stock markets and investments are down.