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Btl
macaque_2
Posts: 2,439 Forumite
The lending rules for Buy to Let are different to private to private mortgages. The two most notable of these are the interest rates set for BTL and the loan to value (LTV) rules.
When you buy a place as an owner occupier, the LTV is only a problem when you come to sell. A BTL loan however is subject to reviews and if the LTV falls below a threshold, the lender can insist that the owner repays some of the capital. Here are the LTV thresholds for Paragon mortgages.
The Maximum Aggregate Loan per person is £20,000,000.
Within these limits the following restrictions apply:
LTV up to 75% - maximum loan £2,000,000
LTV up to 80% - maximum loan £1,000,000
LTV up to 85% - maximum loan £500,000
I would be interested to know how much water BTLs on this site have beneath their keels.
When you buy a place as an owner occupier, the LTV is only a problem when you come to sell. A BTL loan however is subject to reviews and if the LTV falls below a threshold, the lender can insist that the owner repays some of the capital. Here are the LTV thresholds for Paragon mortgages.
The Maximum Aggregate Loan per person is £20,000,000.
Within these limits the following restrictions apply:
LTV up to 75% - maximum loan £2,000,000
LTV up to 80% - maximum loan £1,000,000
LTV up to 85% - maximum loan £500,000
I would be interested to know how much water BTLs on this site have beneath their keels.
What is the loan to value of your portfolio 28 votes
More than 100%
7%
2 votes
85% to 100%
21%
6 votes
75% to 85%
14%
4 votes
60% to 75%
7%
2 votes
less than 60%
50%
14 votes
0
Comments
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Mine are both owned properties - hence no mortgage.0
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Mine is less than 60% and the BTL money is offsetting my residential mortgage/in ISAs etc.. So, while the mortgage is about half the current value of the property, I could pay it off. I would do so but the BTL is not in joint names (at the moment) unlike the residential mortgage. Besides the difference in IRs is marginal (BR+0.74% for residential vs BR+0.89% for BTL).
But come on guys and gals, OP is looking for much higher LTVs. Where are all thoses 90%+ers? Maybe a HPC troll will be along soon to claim being LTV's upto his eyeballs.
GGThere are 10 types of people in this world. Those who understand binary and those that don't.0 -
Few BTLer who are on 90+% LTV will understand enough about maths/finance to know what LTV is.
Bandwagon-To-LetBankruptcy isn't the worst that can happen to you. The worst that can happen is your forced to live the rest of your life in abject poverty trying to repay the debts.0 -
Buy To Lose at the moment isn't it?0
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Few BTLer who are on 90+% LTV will understand enough about maths/finance to know what LTV is.
Bandwagon-To-Let
So cynical some people are they cannot keep to the topic question.Pastures_New wrote:Buy To Lose at the moment isn't it?
Makes you wonder if they will / have screw up the poll as well (who has the LTV on a BTL above 100%?
My properties are both less than 60% and I'm working hard to reduce this further:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:0 -
Then you are in the minority.Bankruptcy isn't the worst that can happen to you. The worst that can happen is your forced to live the rest of your life in abject poverty trying to repay the debts.0
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A BTL loan however is subject to reviews and if the LTV falls below a threshold, the lender can insist that the owner repays some of the capital.
You state this as if its a fact, whereas its not true in most cases.
It may be true for commercial lending on a large scale where the size of the portfolio is looked at, but where individual mortgages are secured on individual properties its not true.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
You state this as if its a fact, whereas its not true in most cases.
It may be true for commercial lending on a large scale where the size of the portfolio is looked at, but where individual mortgages are secured on individual properties its not true.
It surprises me how complacent people have become. A loan of £100,000 is a huge amount of money. Banks get very hot under the collar over defaults of as little as £100. The idea that they would not pay close attention to large BTL debts is crazy. So far, BTLs have have escaped scrutiny because the tide of rising house prices has served as insurance. If you look at the small print however most BTL lenders reserve the right to review the loan. In flat or falling housing market, lenders will pay much closer attention to the LTV and they will exercise this right.0 -
You state this as if its a fact, whereas its not true in most cases.
It may be true for commercial lending on a large scale where the size of the portfolio is looked at, but where individual mortgages are secured on individual properties its not true.
Sadly you are factually incorrect. I looked into BTL recently (the purchase fell through in the end). The mortgage lender did have a clause around "maintenance of value", giving them the right to revalue the property on a three yearly basis, and asking for a sufficient amount to restore the original LTV percentage to be pre-paid.
I was somewhat surprised to see this, and rang the lender to discuss this. They confirmed that it would apply in all cases, regardless of the number of properties.
This may not be in the small print for all BTL lenders. There ARE however lenders who apply thisclause, even to a single property0 -
IveSeenTheLight wrote: »My properties are both less than 60% and I'm working hard to reduce this further
You'll be working hard to keep it less than 90% soon!
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