A new family buy to let mortgage has been launched by Mansfield Building Society which enables landlords to let their property to a close family member with an Interest Coverage Ratio of just 100%.
The new family buy to let product released by Mansfield is tailored to investors who wish to charge rent that is equal to their monthly mortgage payment. This is for those who are not interested in making a profit, but rather are choosing to provide their family with a place to say.
Mansfield Building Society is introducing the product as a response to trends which show a growing number of people are buying properties for family members to reside in. In order to qualify for the mortgage, landlords must have a minimum income of at least £20,000. They must also have sufficient earned income to support the ICR shortfall.
The mortgage is a three-year discounted variable rate, and is available from 4.24 percent up to 75 per cent loan-to-value with a £199 application fee and an £1,800 completion fee.
Head of products at Mansfield Building Society, Mike Taylor, said: ‘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. We can see this type of lending appealing to those looking to give loved ones independence and security whilst retaining and accumulating wealth in the property over time. Not only does this new product show how the Society’s pragmatic underwriting can support niche markets, it is also offering increased choice, something that we believe fits well with our mutual ethos.’