Foundation Home Loans has just unveiled some significant changes to their mortgage products, aimed at landlords seeking more flexibility and profitability in their investments. These changes include the launch of new short-term and holiday let products, as well as reductions in rates and fees on several existing options.

Recognising the growing demand for more versatile rental properties, Foundation Home Loans has rolled out new mortgage options specifically designed for short-term and holiday lets. These are increasingly popular choices for landlords looking to capitalise on the lucrative holiday rental market or accommodate short-term rentals which can potentially offer higher rental yields.

• Short-Term Lets: Landlords can now opt for either a two-year or a five-year fixed rate mortgage, both available up to a 75% loan-to-value (LTV) ratio. The rates start at 6.79% with a fee of 1.25%.
• Holiday Lets: A new two-year fixed rate product has been introduced for holiday lets. This product offers a rate of 6.99% up to a 70% LTV, with a higher fee of 2%.

These new products are designed to give landlords the flexibility to cater to the booming market for holiday and short-term rentals, which can often command higher rents compared to traditional, long-term leases.

Reductions in Fees and Rates on Existing Products

In addition to introducing new products, Foundation Home Loans has also made adjustments to their existing mortgage offerings, reducing fees and rates to make their loans more attractive and competitive.

• F1 Products for Clean Credit Landlords: The fee for the F1 product range, which is ideal for both portfolio and non-portfolio landlords with a nearly clean credit history, has been reduced significantly. For the five-year fixed early repayment charge (ERC3) product, the fee has been lowered from 1.75% to 1%. Importantly, these charges apply only for the first three years.
• F2 Large Portfolio Products: Fees for the F2 range, targeting landlords with larger portfolios, have also seen reductions. The fees for both the two-year and five-year fixed-rate products have decreased from 1.5% to 1.25%. These options come with the added benefits of a free valuation and no application fee.
• Larger Loans: For bigger loans, particularly appealing to those handling more substantial properties or portfolios, the fees have been reduced as well. On the F2 five-year product for loans up to £5 million at 60% LTV and up to £3 million for 70% LTV, fees have been cut from 2% to 1.5%.

Tom Jacob, Director of Product and Marketing at Foundation Home Loans, emphasised the ongoing need for landlords to diversify their portfolios. According to him, the expansion into short-term and holiday let markets is a strategic move driven by the potential for higher rental yields that these types of properties can offer. He reassured that Foundation Home Loans would continue to monitor the market dynamics closely to ensure they provide a wide range of products that cater to the needs of modern landlords, especially those interested in more specialist property types.