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Remortgage of 2 multi-units saving low-earning landlords £650+pcm

Remortgage of 2 multi-units saving low-earning landlords £650+pcm

We were approached by a broker looking to source two remortgage deals for his clients – a married couple who operate a portfolio of ten rental properties all located in the North East of England. 

 

The first property is an end of terrace house containing two flats. The second property is three-storey semi-detached house containing five flats. Both properties are classed as multi-units owned a single freehold and both are located in the same town.

 

The two properties had recently come to the end of their mortgage term with one of the mainstream lenders. Now on a higher reversion rate, the couple wanted to save money by remortgaging them onto lower, five year fixed rates. The couple also wished to raise £30k for home improvements.

 

Both applicants earn less than £25k per annum from their rental property, and with no other form of income, the couple’s options were certainly restricted.


A lot of the mainstream lenders like to see at least one of the applicants earning in excess of £25k per annum outside of rental income. Also, it’s mostly only the specialist lenders that accept multi-units.

 

As a result the broker approached Keystone withe the case because its Classic Range has no minimum income requirement for experienced landlords and accepts multi-unit properties with up to ten flats. The clients were happy with rate and terms were offered within a month of application.

 

Property 1

Property value: £125,000

Loan amount: £82,500

LTV: 66%

Rate: 4.19% fixed for 5 years

Term: 10 years interest only

RTI calculation: 145% @ 4.19%

Product: Classic Range 

Borrower: Individual joint application

Mortgage payment: £293 pcm

Original mortgage payment: £622 pcm

Lender arrangement fee: 2% (£1,650)

Rental income: £736 pcm

Gross yield: 7% pa

Broker proc fee: £495

 

 

Property 2

Property value: £130,000

Loan amount: £82,500

LTV: 63%

Rate: 4.19% fixed for 5 years

Term: 10 years interest only

RTI calculation: 145% @ 4.19%

Product:
Classic Range 

Borrower: Individual joint application

Mortgage payment: £293 pcm

Original mortgage payment: £622 pcm

Lender arrangement fee: 2% (£1,650)

Rental income: £1,278 pcm

Gross yield: 12% pa

Broker proc fee: £495


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