Family Building Society Unveils New 2-Year Fixed Ltd Company BTL Mortgage: What London Landlords Need to Know

A New Mortgage Option for Ltd Company Landlords

Family Building Society (FBS) has launched a two-year fixed rate limited company buy-to-let (BTL) mortgage with an interest rate of 4.69%. This product is available for purchases and remortgages, including a £500 cashback incentive on remortgage applications. As of mid-2024, it is a well-positioned option for landlords operating through limited companies seeking a relatively short fixed-term mortgage.

Why This Matters to London Landlords

Limited company structures have grown increasingly popular among landlords for tax efficiencies and portfolio management benefits. However, limited company BTL mortgages usually come with higher rates and stricter lending criteria compared to personal buy-to-let loans. The introduction of a two-year fixed term at 4.69% offers clarity and cost certainty in a market marked by recent interest rate volatility.

The £500 cashback on remortgages offers an added advantage for landlords considering refinancing or switching lenders.

Practical Implications by Landlord Profile

Single-Unit Landlords: Ideal for landlords holding one or two properties via a limited company who want a short fixed period to stabilise borrowing costs, especially if anticipating refinance or portfolio changes within two years.

Portfolio Landlords: This mortgage can help stagger fixed-rate terms across multiple properties, smoothing cash flow and mitigating refinancing risks. The cashback provides a small but useful cash injection when remortgaging.

HMO Landlords: While available to limited company BTL borrowers, landlords should verify lending criteria and maximum loan-to-value ratios to ensure compatibility with HMO portfolios.

Accidental Landlords: Those who have inherited or retained properties under limited companies might leverage this short fixed term and cashback as bridging finance while planning their long-term strategy.

Key Steps to Take Now

1. Review Lending Criteria: Secure the full Family Building Society lending criteria to understand eligibility, loan-to-value limits, income requirements, and property types accepted.

2. Compare Mortgage Deals: Evaluate the 4.69% two-year fixed rate against existing mortgage rates and fixed terms—consider your cash flow needs and tolerance to interest rate risk.

3. Assess Remortgage Benefits: If your current limited company mortgage is nearing expiry or at a higher rate, calculate potential savings including the £500 cashback.

4. Update Mortgage Documentation: Ensure all mortgage agreements accurately reflect the product terms, fixed period, and repayment responsibilities for proper financial planning.

5. Communicate With Your Mortgage Broker or Advisor: Discuss the suitability of this product within your portfolio. Brokers can also streamline the application process.

6. Plan for Post-Fixed Term: Begin strategizing refinancing or remortgaging well before the two-year term ends to avoid last-minute pressures.

Monitoring and Benchmarking

While FBS's 4.69% rate is competitive for a two-year fixed ltd company BTL mortgage, rates vary by lender and borrower profile. Landlords should benchmark this offering against alternatives from Barclays, NatWest, and specialist lenders considering London market nuances.

How Rentals & Sales Can Support You

We provide tailored portfolio reviews and compliance audits to help landlords integrate new mortgage products effectively. Our support includes:

• Analysing current mortgage structures against this new offer
• Forecasting cash flow impacts from fixed-rate changes
• Advising on documentation and compliance
• Crafting refinancing timelines

Contact us to schedule a consultation and align your mortgage arrangements with your investment objectives.

Compliance Disclaimer: This article is for informational purposes only and does not constitute financial advice. Landlords should consult qualified mortgage advisors or financial professionals before making borrowing decisions.