Bank of China launches interest-only for buy-to-let
Bank of China is providing business buy-to-let mortgages on an interest-only basis for loans up to £1 million.
The bank has always preferred full capital repayment mortgages even though most lenders have offered interest-only for some time.
Aaron Strutt, product director at Trinity Financial, says: “Bank of China has some of the most competitively priced buy-to-let tracker rates. The pay rate and arrangement fees change depending on the size of the mortgage and the percentage on interest-only.
“The bank bases its lending decisions using full affordability assessments to ensure the mortgage is affordable. It checks the applicant’s creditworthiness, income, loans and overall financial commitments. The rental income generated from the property will also be assessed and should boost the maximum loan size.”
Bank of China will not lend to professional landlords, although it accepts applications from clients with buy-to-let portfolios providing they are less than ten properties. The property limit includes their main residence, any related or jointly owned properties and the proposed purchase or remortgage.”
Term-tracker buy-to-let rates
The bank's lowest rate is 2.74% and priced at 2.29% over the Bank of England base rate for the life of the mortgage. It is available up to 60% loan-to-value or 55% loan-to-value if the loan is taken on interest-only. The overall cost for comparison is 2.74% APRC.
The rate increases to 3.04% or 2.79% over the Bank of England base rate for the life of the mortgage up to 75% loan-to-value or 70% loan-to-value on interest-only. The overall cost for comparison is 3.10% APRC.
Both rates have a maximum loan size of £500,000, and they have £1,895 arrangement fees. There is a 1% early repayment charge payable during the first year.
For mortgages over £1m and up to £5m, the arrangement fee is 0.5% of the loan amount up to 65% loan-to-vale. Interest-only is not available, and for large loans and the rate will increase.
To secure a mortgage through Bank of China call Trinity Financial on 020 7016 0790.