GMAC-RFC fills the black hole landlords face
Landlords are increasingly struggling to meet their mortgage repayments as the gap between purchase prices and achievable rents is widening, according to recent research by GMAC-RFC.The innovative lender has today announced the launch of a new tracker product designed to solve this issue and to address a solution to the reducing landlords profit yield returns.
The new Buy To Let product offers investors a lower rate of interest than competitors and existing products in the market and requires 27% less rental income enabling the landlord to purchase or remortgage more properties with GMAC-RFC.
Jeff Knight, Director of Marketing, GMAC-RFC says “The new BTL product offers a solution to the property investor in the current environment where mortgage rates may rise but rental rates may not. This product offers a lower rate of interest than competitors and existing products and an extremely low rental requirement.”
Knight continued “With a loan of £130k, Landlords could save £147 per month. To put this into perspective, for a landlord with seven properties at this average loan size, they could save £12,375.72 per year against the next best rate product currently available. For those in the South East and Central London area, they can expect more than double that amount. This opens up more opportunities to increase their property portfolios and remortgage existing properties due to end on their current initial product rate. ”
GMAC-RFC remains confident that other lenders will have to follow to maintain their share of the Buy To Let market and to give landlords the choice of where they can place their business as their options are currently declining.
The new product details are as follows:
Tracker with a pay rate of BBR minus 0.01% (5.00%) for three years
Reverts to BBR plus 0.99% (5.99%) for the remainder of the term
Purchase or Remortgage
Maximum LTV of 85% LTV
5 year ERC of 5%, 4%, 3%, 2%, 2%
Rental assessment calculated at 100% of pay rate
Arrangement fee of £1495