Specialist Buy to Let Mortgages for Complex Cases

If you are a 'complex' borrower looking for a buy-to-let mortgage, lenders have a love-hate relationship with you. 

Complex borrowers want specialist loans for corporate borrowing or to buy or refinance HMOs (houses in multiple occupation) or holiday lets.

Lenders like these deals as they deliver strong margins at low risk, but although some lenders will consider lending on these properties, few are willing to advance cash to complete a deal.

The winners are corporate borrowers, portfolio landlords and HMO providers, says research by property experts Finova.

The research revealed complex borrowers are underserved in the buy-to-let market, closely followed by holiday let providers, and blamed the problem with borrowing on a lack of lenders willing to serve the market.

Not enough lenders to serve specialist markets

Fewer than one in three lenders have a platform for specialist lending, although a third are considering entering the complex market, and a quarter would consider the possibility of entering the market at some stage.

Hamza Behzad, business development director at Finova, said: "The growth of the specialist buy-to-let market is too significant to ignore. What was once a niche segment is now a core part of many lenders' strategies - but the nature of the customer has changed dramatically.

"Today's specialist borrowers are more complex, and legacy systems weren't built to support the nuanced affordability assessments or Know Your Business/Know Your Customer checks they require. Our research shows that while these products offer stronger margins and lower risk, many lenders are still relying on rigid processes that can't keep up."

Target buy-to-let best mortgage rates

These are this month's standard best buy to let mortgage deal interest rates for the main categories of lending.

Few of these lenders will consider applications for specialist lending, and if they do, the rates and fees are unlikely to be competitive with the broader buy-to-let market.

However, 5,105 separate mortgage deals are listed.

The best specialist buy-to-let rate is 3.54 percent fixed for two years at up to 75 percent loan-to-value for corporate borrowers from Molo Finance.

Source: Moneyfacts

An example mortgage is borrowing £170,000 over 25 years initially at 4.58 percent variable for 25 months, reverting to 8.49 percent variable for the term. 25 monthly payments of £648.83 and 275 monthly payments of £1202.75. Total payable £518,201.00 includes loan amount, interest of £346,977, a zero valuation fee and product fees of £999. The overall cost for comparison is 8.2 percent APRC representative.