According to the lender the new product is available to individual landlords, limited companies and portfolio landlords, comes with a reduced product fee of 1% and borrowers will receive £500 cashback on completion.
Foundation said the product was being launched to support those landlords looking to secure a highly competitive pay rate and rental calculation for five years along with reduced upfront costs.
There is no limit to the background portfolio size of the borrower, subject to a maximum of £3m with Foundation. The lender uses ICR calculated at the pay-rate, and at only 125% for limited companies and basic-rate taxpayers, and 145% for others.
George Gee, Commercial Director at Foundation Home Loans, said: “We have listened to intermediary feedback to design a product structure that meets market appetite: five years ago, there was a popularity shift from two to five-year fixed rates, and we anticipate that to continue for upcoming mortgage transactions in 2021.
"Remortgage activity has been subdued during the pandemic to date but we are seeing an increasing number of landlord borrowers seeking to utilise their existing property portfolio in order to release equity to fund future purchases. This remortgage-only product is competitively priced particularly in the current market; coupled with a low product fee of 1%, the cashback, and Foundation’s flexible approach to underwriting, we believe this should be an excellent addition to the product choices available to advisers.”
