Why should my client choose a Freestyle® Buy to Let mortgage?
Who can apply for a Freestyle® Buy
to Let Mortgage?
What circumstances are appropriate for a Freestyle®
Buy to Let Mortgage?
How much can my client borrow?
How does my client repay?
How long can my client take to repay?
How does the interest rate tiering system work?
What happens when a fixed rate or a discounted period finishes?
What about security?
What insurance cover does my client need?
Are there any initial costs involved?
Running the mortgage
How are repayments made?
How does my client keep up to date with their mortgage?
What about reviews?
Flexible options
Can my client make overpayments on their Freestyle®
Buy to Let Mortgage?
Can my client take payment holidays?
Options for the future
What if my client wants to buy a new house in the future?
What if my client needs to borrow more money in the future?
First things first
Why should my client choose a Freestyle Buy
to Let mortgage?
When we developed our Buy to Let mortgage, we wanted to give your client flexibility.
We wanted to create a mortgage which enables your client to buy more than one
property. A mortgage your client could adapt as their needs and circumstances
develop over the years. Throughout the life of your client's mortgage they've
got options such as the ability to
make overpayments, take payment holidays or borrow
more funds.
Who can apply for a Buy to Let mortgage?
UK residents between 25 and and 64 subject to affordability. Any applicant whose term takes them beyond the age of 69 is limited to 65% LTV.
Joint applicants, the employed and the self-employed. Minimum employment income £20,000 for single applicants or £30,000 joint (excluding rental income).
Your client may not need to verify their income for mortgages up to 75% loan to value.
What circumstances are appropriate for a Freestyle
Buy to Let mortgage?
If your client wants to build a property portfolio that can provide them with
an income in retirement, it's a cost-effective way to buy up to ten properties.
It's also the perfect choice if they'd like to buy a property for their children
when they are studying away from home or for purchasing a holiday home. In fact,
it's the ideal way to buy any property for investment purposes.
How much can my client borrow?
We will lend up to 75% of the property's value or purchase price, whichever
is the lower up to a maximum of £500,000. Your client can borrow between
£40,000 and £500,000 and can purchase up to ten rental properties
(subject to lending terms). The maximum loan on one property must not exceed
£500,000. Rental income must cover at least 110% of your client's monthly
interest payment, calculated using the appropriate rate. The appropriate rate
is the interest rate applicable after the end of the initial discount rate period
(for products with an initial discount rate) and the initial fixed rate for
the appropriate loan to value (for products with an initial fixed rate).
How does my client repay?
They can pay interest only - and if they do we strongly recommend they run a
suitable investment plan alongside their mortgage, although this is not a condition
of the mortgage.
Alternatively, they can pay capital and interest, with each monthly payment
covering part of the capital and part of the interest, reducing their outstanding
mortgage balance each month.
How long can my client take to repay?
They decide on the term of their mortgage. The minimum period is five years and it must be repaid by the time they're 75 (subject to income).
How does the interest rate tiering system work?
One of the most attractive features of our variable rate Freestyle® Buy
to Let Mortgage is the tiered interest rate system. There are three tiers -
and the more your client can deposit at the start of their mortgage the better
their rate of interest will be over the term of their mortgage.
What happens when a fixed rate finishes?
The rate will automatically revert to the appropriate Freestyle Buy to
Let standard variable rate and we'll write to your client to tell them how much
their payments will be. At this point they could opt for another fixed rate,
subject to availability and a booking fee.
What about security?
Standard Life Bank will take first legal charge over the mortgaged property which must be located in the UK. All properties must be surveyed by arrangement with Standard Life Bank approved valuers. At a minimum, we require to see a standard valuation report.
What insurance cover does my client need?
Your client must take out buildings insurance before we release their mortgage funds and it must remain in place throughout the term of their mortgage.
At Standard Life Bank, we are delighted to introduce you to AXA Insurance who offer competitive buildings and contents insurance for your clients. Whether your clients are existing Standard Life Bank customers or not, you'll find AXA Insurance can offer the right cover at the right price.
To register with AXA Insurance just print off the registration form below and return to:
Agency - Broker Development
AXA Insurance
Civic Drive
Ipswich
IP1 2AN
AXA Insurance Registration form
On receipt of your registration form, AXA Insurance will send out an agreement for you to sign and return. You'll then receive your AXA Insurance agency number so you can start introducing business to AXA Insurance.
If you have any problems with the registration form, you can call AXA Insurance on 01473 204315.
Are there any initial costs involved?
Running the mortgage
How are repayments made?
Your client can choose the day of the month they want to make their payments
- and they can change it whenever they want by simply giving us a call. Monthly
payments are made by Direct Debit.
How does my client keep up to date with their mortgage?
To help your client keep up with all the transactions on their account, they'll
receive a mortgage statement annually. They can also request an interim statement
at any time. Each statement will detail the overpayments and outstanding balances
on their Freestyle Buy to Let mortgage accounts.
What about reviews?
At the initial application stage, your client can decide when they want to
have their account reviewed. This can be annually or when interest rates change
- they can choose to alter this whenever they wish. At reviews, we will add
up the total amount of all payment on their Freestyle Buy to Let mortgage
and recalculate their monthly payments in line with their original term. After
these adjustments, they are still free to make overpayments or take payment
holidays in the normal manner.
Flexible options
Can my client make overpayments on their Buy to Let
mortgage?
Yes, they can make overpayments either regularly or as a lump sum. The effect of overpayments applies immediately because we calculate
interest daily. This can reduce the term of your client's mortgage or reduce their monthly repayments and save
them money in interest.
With our Freestyle Buy to Let fixed rate mortgage, your client can overpay up to 10% of the balance outstanding every year. Early repayment charges apply if overpayments are more than 10% of the capital outstanding in 12 months, or if the mortgage is repayed in full within the fixed rate period.
Any overpayments will build up a Prepayment Reserve which can be borrowed back whenever they want. For example, if they are considering a major outlay (property improvements perhaps) they can borrow back funds they have already overpaid and repay them at our Freestyle Buy to Let additional borrowing rates available at the time. Your client could also use their Prepayment Reserve to fund the deposit on another property.
An admin fee applies every time your client borrows from their Prepayment Reserve. If your client repays the Buy to Let mortgage in full within the tie-in period, they will incur early repayment charges.
Any funds borrowed back are subject to lending criteria a minimum borrowing amount of £1,000. Borrowing back overpayments will increase your client's monthly payments, interest payable and remaining balance secured on the property.
A Redemption Discharge Fee may apply to some mortgages, if so this will be specified in the offer. That, plus any early repayment charges, will apply. However, as long as your client completes their new Freestyle Mortgage within 90 days of redeeming the original one, these charges will be refunded.
Can my client take payment holidays?
Once your client has made six consecutive
payments, they can take up to two payment holidays per year per property (subject
to ability to pay and sufficient funds in their Prepayment Reserve). To arrange a payment holiday they
will need to give us 22 days' notice.
Taking a payment holiday will increase your client's monthly payments, interest payable and remaining balance secured on their property.
Options for the future
What happens if my client wants to buy a new house
in the future?
Your client can purchase up to ten rental properties, in addition to a Standard
Life Bank residential mortgage, subject to lending terms. All we ask is that
the combined balance of their mortgages with Standard Life Bank does not exceed
£500,000. If they wish to purchase a new property, they must take out
a new Buy to Let mortgage. They can use their existing Freestyle Buy
to Let mortgage Prepayment Reserve to fund the deposit for a further rental
property.
Of course, if they require additional funding, we will be happy to consider their application. Call us on 0845 606 6710 for further information on Credit Re-assessment.
What if my client needs to borrow more money in the
future?
Freestyle Buy to Let mortgages are flexible to keep pace with changes
in your client's circumstances. If the value of their property increases for
example, they could find that they qualify for a Credit Re-assessment - which
may mean they could borrow more money. If Credit Re-assessment is carried
out and they borrow additional funds, their
loan to value tier may increase.
A fee of £99 is payable for a Credit Re-assessment. Borrowing more will increase your client's monthly payments, interest payable and the remaining balance secured on their property.
The next step
How do I apply?
To apply for your client's Freestyle Buy to Let mortgage, you can get
an online quote and apply here or call us on 0845 606 6710
(8am-6pm Mon-Fri).
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