At Landbay, our priority has always been to source prime mortgages for our lenders, each of which are expertly underwritten by our highly-experienced lending team. To ensure that we continue to do the best by you, we are constantly reviewing and improving our processes across the business. Our latest update is an impending change to our mortgage terms.
After listening to feedback from our network of specialist broker partners, and in light of our own industry knowledge and occupation in the market, we will be improving our service at Landbay by offering mortgages of up to 25-year terms. These new terms are available to borrowers immediately but we do 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 3-5 years. For example, with our current products, after the Fixed-Rate period expires our mortgages revert to a Tracker Rate equivalent of LIBOR + 4.75%. In the majority of cases, borrowers will be able to refinance their mortgage at a rate significantly lower than this. Moreover, 3 months before the reversion date, we will offer the borrower a retention product that will typically be cheaper than the reversion rates borrowers would have to pay.
Of course, not all borrowers will choose to re-finance with Landbay, or any other lender at the end of their Fixed-Rate period. In this situation, Fixed-Rate mortgages that revert will switch to a Tracker Plus-Rate, especially for our investors, that is 0.5% higher than our standard Tracker-Rate.
To date, Landbay’s mortgages have performed extremely well. Over the last 42 months we’ve had zero default arrears or late payments and all our mortgages are secured on buy-to-let properties with average LTVs of less than 70%. As a result, we’re confident that defaults do not necessarily mean losses for our investors.
We’re excited about the future and the work we’re doing to bring investors and borrowers new opportunities to experience a better and fairer buy-to-let market. For more information about the change in our mortgage terms, please contact email@example.com.