What is a Portfolio Landlord?
The Prudential Regulatory Authority (PRA) definition of a portfolio landlord is "borrowers with four or more distinct mortgaged buy-to-let properties, either together or separately, in aggregate."
If you fall into this category, it will mean lenders need to carry out additional checks when underwriting your mortgage application, these include:
• Your property investment experience
• The gross amount of your mortgage borrowing across all properties
• Your assets and liabilities, including tax liability
• Historical and future expected cash flow from your portfolio
• All other sources of income
Many full time or professional landlords – those who make their income primarily from rental property – will fall under this bracket, and will need to apply for portfolio landlord mortgages instead of standard buy to let mortgages.
How can we help?
Jordan Lynch has been arranging mortgages for portfolio landlords since 2006. We take the time to get a detailed understanding of your portfolio and long term aims and will then provide you with a tailored solution that fits your plans. We have a wide range of lenders who are able to support portfolio landlords and use our connections with these lenders to get you the most cost-effective terms available. Whether it is a single loan secured against multiple properties or individual mortgages across the portfolio, we will take care of the hard work for you. We can also work alongside your accountant to ensure you find the right balance between tax efficiency and long term value for money on your assets.
What products are available?
Most mainstream lenders have a ‘portfolio product range’ but the rates tend to be up to 0.50% higher than their standard Buy-to-Let products.
This market is of particular interest to the specialist lender sector that has grown rapidly in recent years. Jordan Lynch has excellent relationships with all such lenders and can negotiate bespoke terms on behalf of portfolio landlords.
How many Buy-to-Let mortgages can I have?
There is no limit to the number of buy-to-let mortgages you can have, though your portfolio will be vigorously underwritten the more properties you have.
The underwriting process will look in detail at historic and anticipated cashflows from the portfolio and will stress test the interest rate payable to ensure that the portfolio can meet its financial obligations if interest rates increase in the future.
Additionally, lenders will have their own exposure limits stipulating the maximum number of properties, or gross loans you can have with that lender. It is for this reason many portfolio landlords will have to syndicate their mortgaged properties across a number of lenders.
Are there any age restrictions?
The minimum age for most lenders is 18. For older borrowers who are considering multiple buy-to-let mortgages, lenders may stipulate a maximum age at application or a maximum age at the end of the mortgage term. Jordan Lynch also has access to a number of buy-to-let lenders that do not have a maximum age.
What documents will I need to provide?
Typically, you will need to provide copies of the following documents:
- Proof of income (Tax calculations (Sa302’s) and tax year overviews)
- Detailed portfolio schedule (spreadsheet)
- Three months Bank statements – showing rental credits