95% LTV on second home

debtuptoeyeballs

Hi folks
My sister and her HB recently remortgaged their flat in Glasgow in order to clear debts, pay for wedding, and serve as deposit to move on while they rent out the flat for a few years. They are looking at a house at 160k (fixed price), and have about 20k in savings. Ideally they want a 95% mortgage as there are repairs to do, furniture etc, and contingency pot for the BTL.
She was approved in principal by Nationwide today but they have a 80% LTV limit on 'second homes'. Does anyone know of a 95% product available at the minute for this scenario? This assumes that the BTL is self-financing. Do all lenders consider this to be a 'second home'?
Thanks for your help

nspnick

I would try Halifax and Abbey. For more options you may be as well to ask whole of market no fees mortgage broker

Tiddler_2

If they are looking for the 95% mortgage on the property they are going to live in, then this is not a "second home loan" it is going to be their main residence and so quite a few lenders will look at it.......well those currently doing 95% loans anyway (except nationwide)

Halifax will want the rent on the flat to cover that mortgage on an interest only basis (+25%) when calculated at Halifax's SVR currently 7%.

You would have to pay a HLC with Halifax, so if possible I would put down 10% deposit.

debtuptoeyeballs

Thanks very much for the replies folks
Hmm...I wonder if the Nationwide didn't apply the main residence logic? She has been offered (in principal anyway) 95% with Bank of Ireland but with a HLC. Unfortunately they just have to suck it up as they need the cash upfront for furniture etc. It's a shame but it seems it's the least worst option for them! She is a Halifax customer so I will get her to check them out aswell altho I think she said their rates are worse than BOI (3yr fixed at 6.4%).