Newbury Building Society has launched its first holiday let mortgage product.
The deal is a discount mortgage at 1 per cent below Newbury’s standard variable rate for three years, giving an initial pay rate of 3.45 per cent. The maximum loan-to-value is 75 per cent up to a loan size of £300,000, and 60 per cent for loans between £300,001 and £500,000. The product comes with a £1,500 application fee.
Newbury says the product has been designed to target customers who are either purchasing, remortgaging or looking to borrow additional funds where the property is let on a holiday basis for some or all of the year. The property must be located in a suitable holiday location in England (not central London) or Wales to be eligible.
Potential holiday let income will be considered when assessing affordability. Calculations will also take into account top-slicing and capital raising to allow investors to see more value from their rental portfolios.
Newbury Building Society lending manager Roger Knight says: “We are delighted to further strengthen our buy-to-let mortgage product offering. The decision to launch a holiday let specific product followed extensive analysis of whether there was appetite for this type of mortgage within our current borrower base as well as listening to feedback from intermediaries who have informed us demand is high. As a mutual building society, we want to ensure we give brokers the right tools to help provide their clients with the right products; we believe our holiday let does just that.”