P2P lender Landbay revamps its mortgage range
Landbay aims to be the lowest risk peer-to-peer lending model available, by using clients’ money to lend as mortgages to seasoned buy-to-let landlords, borrowing against high quality UK residential property that is already producing an income from rent.
Savers with sufficient funds can either choose from two different products, or split their money across both.
The tracker mortgage is the industry’s first peer-to-peer tracker and pays savers (lenders) the Bank of England Base Rate plus 3%. Savers (lenders) can withdraw some or all of their money from the tracker product at any time without penalty or loss.
John Goodall, cofounder and CEO of Landbay said:
“We are very pleased to be offering the first peer-to-peer tracker product, especially as increases in interest rates look ever more likely and potentially imminent.
“With banks continuing to pay very low and even declining rates to their savers, the launch of our new tracker product is very timely and great news for Britain’s long suffering savers.”
Landbay is also launching a fixed rate product currently paying lenders 4.2% for 3 years, reverting to the tracker rate after that. Again, savers (lenders) are free to withdraw some or all of their money at any time without incurring a charge, but those in the fixed rate product may have to accept a loss if more recent fixed rate offers have increased.
For landlords taking out the products, rental income from the property must exceed 125% of monthly repayments on the mortgage and the loan-to-value ratio is restricted to 72%. Should a landlord default and the property have to be sold, no loss will be incurred by lenders unless the property had to be sold at a loss of more than 28%.
Goodall said: “These new Landbay products offer lenders two distinct options to meet their specific needs and preferences, and adds unique new power to the rapidly growing peer-to-peer finance marketplace in the UK.”