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Low-earning landlord raises capital against 2-flat block

Low-earning landlord raises capital against 2-flat block

A broker called us looking for finance for his client who wanted to raise capital to repay a large, personal loan.


The client is a full-time landlord who owns four rental properties in the North of England. The property is a townhouse which, 30 years ago, was converted into two self-contained flats.


The broker approached Keystone because of three complexities which meant that only a specialist lender would accept the case:

  1. The client’s income is solely from rent and less than the standard £25k pa threshold of many lenders

  2. The property is classed as a multi-unit freehold block which most mainstream buy to let lenders avoid  

  3. Both flats share the same electricity and water supply – again, not acceptable to many lenders because this arrangement can lead to tenant disputes

Keystone's underwriters take a common-sense approach, so after carefully considering this unusual scenario agreed to the following terms. The client chose a three year fixed rate from the Classic Range. 

Property value: £125,000

Loan amount: £93,750

LTV: 75%

Rate: 4.19% 3 year fixed

RTI calculation: 145% @ 5.5%

Term: 25 years interest only

Borrower: Personal application

Lender arrangement fee: 2% (£1,875)

Product: Classic Range

Mortgage payment: £334 pcm

Rental income: £1,300 pcm

Gross yield: 8.5% pa

Proc fee0.6% (£562)



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