Swansea Building Society launches new mortgage products for limited companies

Swansea Building Society has announced the launch of two new mortgage products available from October 1, 2024. These products are specifically designed for limited companies looking to invest in buy-to-let and holiday-let properties, offering flexible terms to support property purchases, remortgaging, and capital raising.

The first product, the Limited Company Buy to Let Mortgage (LBTL60), is ideal for limited companies aiming to purchase, remortgage, or raise capital on residential properties to let. The mortgage offers a variable rate of 6.35%, which is 0.55% above the Society’s Base Rate, currently set at 5.80%. The product allows for loans ranging from £50,000 to £500,000, with a maximum loan-to-value (LTV) ratio of 60%.

Applicants will be required to pay a £250 application fee, and a 1.5% arrangement fee, which can be added to the loan amount. Repayments can be made on either a capital and interest basis or an interest-only basis, with borrowers needing to provide evidence of how they intend to repay any interest-only loans. An early repayment charge of 1% is applied during the first three years, but no charges will apply after that period. Additionally, regular overpayments are permitted, allowing borrowers flexibility in managing their finances.

The rental income for the property must cover at least 125% of the mortgage payment, and personal income will not be considered in the affordability assessment. The product is designed for property-owning directors of UK-registered companies. Other eligibility requirements include a minimum property value of £75,000 and, for one of the directors, holding or undertaking to obtain a Rent Smart Wales license within three months of completion.

The second product, the Limited Company Holiday Let Mortgage (LHOL60), is aimed at limited companies looking to invest in holiday-let properties. It also offers a variable rate of 6.35%, 0.55% above the Society’s Base Rate, which is currently at 5.80%. Loans for this product range from £50,000 to £155,000, with a maximum LTV ratio of 60%. Similar to the buy-to-let product, borrowers are required to pay a £250 application fee, along with a 1.5% arrangement fee. Repayments can be made on either a capital and interest or an interest-only basis, with an early repayment charge of 1% during the first three years. Regular overpayments are also permitted.

The rental income for the holiday let property must cover at least 145% of the mortgage payments, based on a stressed mortgage rate. The property must meet specific criteria to qualify as a holiday let, and companies will need to provide verification from a holiday letting agent regarding the potential rental income. Additionally, the highest-earning director must have a minimum income of £35,000 from employment or self-employment.

These new products complement the Society’s existing Limited Company Buy to Let (BTL) and Holiday Let (HL) offerings, which allow for a maximum loan-to-value (LTV) of 75%, details of which are published on the intermediary section of the Society’s website.

Alun Williams, Chief Executive of Swansea Building Society, said:

“We are thrilled to expand our mortgage offerings with products tailored to limited companies, providing flexibility and support to investors in the buy-to-let and holiday-let markets. These products reflect our commitment to meeting the needs of the growing property investment sector and our dedication to helping businesses expand their property portfolios.”