Hodge reintroduces 5-year fixed rate holiday let products

Hodge has reinstated its 5-year fixed rate products, added a new 2-year fixed rate product, and reduced the rate on its current 2-year fixed rate product by 0.95%.

Rates have also been reduced across the holiday let retention range by up to 0.83%.

The specialist lender has also made criteria changes.

As of November 28th, holiday let lending will be restricted to non-portfolio landlords, meaning that Hodge will only accept holiday let mortgage applications from property investors who have three or fewer mortgaged properties excluding their primary residence.

In light of recent tax changes in the Spring Budget, stress rates on these products are also changing.

Stress rates for the 5-year holiday let products will increase to a maximum of pay rate +2% or 5.5%, while stress rates for pound for pound remortgages will increase to the maximum of pay rate +2% or 5.5%.

There has been no change to the 2-year stress rate, meanwhile, the Interest Coverage Ratio (ICR) will be reduced across the board from 145% to 140%.

The new product rates include: a 2-year fixed with a loan-to-value (LTV) of 75%, a £1,995 product fee and an interest rate of 5.75%; and a 2-year fixed with a 75% LTV, £995 product fee, an initial rate of 7.00%, a follow-on rate of 6.05%, and a discount of -0.95%.

For those seeking a longer-term option, a 5-year fixed is available with a 75% LTV, a product fee of £1,995 and an interest rate of 5.66%, along with another 5-year fixed, with a 75% LTV, lower product fee of £995 and an interest rate of 5.78%.

James Enos, national account manager for Hodge, said: “It’s been nearly five years to the day since we launched our first holiday let product at Hodge, and a lot has happened in the holiday market in that time. 

“The reintroduction of our popular 2- and 5-year fixed products and the rate reduction on our 2-year product will give investors more options.”

Enos added: “Despite the difficulties the holiday let market has seen in recent years, it is still a popular investment option for many.

“Our products also allow investors to rent their holiday lets on Airbnb and stay at their properties for up to 90 days with no minimum income requirements, increasing their popularity.”

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