Added: 30 October 2017

Ipswich Building Society boosts its Buy to Let range with two new low loan, low fee products

Two and five year fixed rate products are aimed at those seeking a smaller loan size

Ipswich Building Society has launched two new Buy to Let low loan, low fee products aimed at Buy to Let borrowers looking to purchase or remortgage a property with a smaller loan up to £150,000. The two products offer the same fixed rates as the Society’s main range, but have a reduced completion fee.

Following a return to the Buy to Let market earlier this year, Ipswich Building Society is fulfilling its commitment to increasing accessibility in the mortgage marketplace with this latest launch. The products are also aimed at existing Buy to Let borrowers of other lenders looking to take advantage of transitional rules, where rental income is required at 125% of mortgage pay rate instead of the 145% required for new borrowers. This will further increase the choices on offer to those who want to remortgage where they may be restricted by FCA’s rules for calculating mortgages for Buy to Let landlords.

The following products have been launched:

•    A Buy to Let 2 year fixed rate available for purchase and remortgage at 2.95% fixed until 31.12.19, with a maximum LTV of 75%, completion fee charged at 0.5% of loan amount and £199 application fee (5.0% APRC*).
•    A Buy to Let 5 year fixed rate available rate for purchase and remortgage at 3.27% fixed until 31.12.22, with a maximum LTV of 75%, completion fee charged at 0.5% of loan amount and £199 application fee (4.6% APRC*).
All products have a maximum loan size of £150,000 and a minimum loan size of £75,000, and will benefit from the Society’s popular 50% fee-free overpayment facility which enables borrowers to repay without penalty up to 50% of their original loan amount while in the fixed rate period.

For the two year fixed rate product, overpayments made in excess of 50% will incur a 3% early repayment charge calculated on the overpayment amount. For early redemption of the loan a 3% charge applies, calculated on the original loan amount.

For the five year fixed rate product, overpayments made in excess of 50% will incur a 5% early repayment charge calculated on the overpayment amount. For early redemption of the loan a 5% charge applies, calculated on the original loan amount.

Commenting on the two new products, Richard Norrington, CEO at Ipswich Building Society, said: “We are continuing to offer competitive products in the Buy to Let market and are pleased to expand our existing range with two new products that will provide new options to those seeking a low loan deal. The smaller fee size is a further benefit, which will make the products more attractive to a new variety of borrowers including those remortgaging from other lenders and wishing to take advantage of transitional arrangements”.

“By employing a manual approach to underwriting, we will be able to offer choice to creditworthy Buy to Let borrowers who may be finding it challenging to get on the property ladder.”

For residential and Buy to Let remortgage applicants, the Society offers fee assisted legals and a free valuation (up to maximum property value of £1m). The range is available to direct applicants in England and Wales, and via selected intermediary partners and all intermediaries based in the Suffolk heartland area.

*APRC (Annual Percentage Rate of Charge): The annual rate charged for borrowing expressed as a percentage over the term of the loan.

Product Representative Examples

Two Year Fixed Rate
A mortgage of £140,000.00 payable over 25 years initially on a fixed rate until 31 December 2019 at 2.95% and then on our Standard Variable Rate currently at 5.24% for the remainder of the mortgage term would require 26 monthly payments of £663.73, followed by 274 monthly payments of £828.38. The total amount payable would be £244,687.10 made up of the loan amount plus interest (£103,498.10), an application fee of £199, a completion fee of £700, a valuation fee of £160, a mortgage funds release fee of £35 and a mortgage discharge fee of £95. This example assumes the completion fee and mortgage funds release fee are added to the loan and that interest is charged on these fees over the mortgage term The overall cost for comparison is 5.0% APRC representative. [This representative example is based on assumptions that the loan would start from 17 October 2017]

Five Year Fixed Rate
A mortgage of £140,000.00 payable over 25 years initially on a fixed rate until 31 December 2022 at 3.27% and then on our Standard Variable Rate currently at 5.24% for the remainder of the mortgage term would require 62 monthly payments of £687.31, followed by 238 monthly payments of £813.44. The total amount payable would be £236,665.94 made up of the loan amount plus interest (£95,476.94), an application fee of £199, a completion fee of £700, a valuation fee of £160, a mortgage funds release fee of £35 and a mortgage discharge fee of £95. This example assumes the completion fee and mortgage funds release fee are added to the loan and that interest is charged on these fees over the mortgage term. The overall cost for comparison is 4.6% APRC representative.  [This representative example is based on assumptions that the loan would start from 17 October 2017]