Dudley Building Society has launched two-year discount mortgage products for buy-to-let (BTL) and holiday let customers, while Hodge has reintroduced its five-year fixed rate holiday let products.
Dudley’s products offer rate reductions of up to 0.77% and are aimed at landlords and holiday let investors looking for short-term financing solutions for purchases or remortgages.
The BTL two-year discount product offers a competitive rate at 5.48%, down from 6.25% and is available up to 80% loan-to-value (LTV).
It comes with an arrangement fee of £750 and provides an early repayment option that will allow borrowers to repay up to 10% of the advance amount annually without penalty.
For early repayment beyond this limit, an early repayment charge (ERC) of 1% applies in the first year and 0.5% in the second year.
The product is suitable for both purchase and remortgage purposes, supporting loan sizes between £25,000 and £1,000,000.
The holiday let two-year discount is the same discounted rate of 5.48% and is also available up to 80% LTV with a £750 arrangement fee.
It also allows up to 10% of the advance amount to be repaid annually without penalty, and an ERC of 1% in the first year and 0.5% in the second year for early repayments exceeding the limit.
The product supports loan sizes from £25,000 to £1,000,000 and is available for both purchases and remortgages.
Borrowers can choose between capital and interest or interest only repayment methods, on both products.
Dudley Building Society distribution director Robert Oliver says: “The introduction of our new Buy-to-Let and Holiday Let products marks another important step towards supporting landlords and holiday let investors with options that meet their specific needs.”
Meanwhile, Hodge has re-added its five-year fixed rate products. A five-year fixed, up to 75% LTV with a product fee of £1,995 comes at a rate of 5.66%.
The lender has also reduced the rate on its current two-year fixed rate product by 95 basis points. Rates have also been reduced across the holiday let retention range by up to 83bps.
A two-year fixed, up to 75% LTV with a product fee of £995 has been reduced by 95bps to 6.05%.
The specialist lender has also made criteria changes, effective from tomorrow.
Holiday let lending will be restricted to non-portfolio landlords, meaning that Hodge will only accept holiday let mortgage applications from property investors who have three or less mortgaged properties excluding their primary residence.
The lender has also amended the stress rates on these products after the recent tax changes in the Budget. These include:
Stress rates for the five-year holiday let products will increase to a maximum of pay rate +2% or 5.5%
Stress rates for pound for pound remortgages will increase to the maximum of pay rate +2% or 5.5%
There is no change to the two-year stress rate
The interest coverage ratio (ICR) will be reduced across the board from 145% to 140%.
Hodge national account manager James Enos states: “It’s been nearly five years to the day since we launched our first holiday let product at Hodge, and a lot has happened in the holiday market in that time.”
“The reintroduction of our popular two and five-year fixed products and the rate reduction on our two-year product will give investors more options.”