Landbay now offering mortgages of up to 25 years
LANDBAY is now offering mortgages of up to 25-year terms and expects to attract more borrowers as a result.
The peer-to-peer lender, which specialises in buy-to-let mortgages, said that the change is in response to feedback from its network of specialist broker partners, as well as its own industry knowledge and experience in the market.
Until now, Landbay offered buy-to-let mortgages of up to 10-year terms.
The new, longer mortgages are available to borrowers immediately but Landbay said it does not expect investment in new loans to be affected until January 2018.
“As well as an expected increase in the numbers of borrowers we see, it is worth noting that most borrowers will look to re-finance their mortgage after the initial period and so this change will not alter our expected average mortgage duration of three to five years,” the London-based firm said in a blog post on its website last week.
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With its current products, after the fixed-rate period expires, Landbay’s mortgages revert to a tracker rate equivalent of Libor + 4.75 per cent.
Borrowers will usually be able to refinance their mortgage at a rate significantly lower than this, the firm said. However, if borrowers do not re-finance at the end of the fixed-rate period, the mortgages will switch to a tracker-plus rate that is 0.5 per cent higher than the standard tracker rate.
Landbay reported a record month of lending in September, channelling £6.31m across 31 mortgages. It attributed the increase to higher investment inflows and a wider range of intermediary partners on the borrower side.
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The company has unveiled a number of new partners in recent months, including Positive Lending, 3mc and Vantage Finance.
Landbay said it has had zero defaults or late payments on its mortgages over the last 42 months and all facilities are secured on buy-to-let properties with an average loan-to-value of less than 70 per cent.