A specialist buy to let lender says some mainstream mortgage companies are over-charging borrowers who have incorporated in order to minimise their liability as a result of Chancellor George Osborne’s tax changes.
The commercial director of Foundation Home Loans - which announced last month that its own Limited Company BTL mortgage would be priced at the same rate as its core range - says it cannot be right to expect borrowers to stump up additional fees just because they have taken the until-now unusual step of incorporating.
"Certain lenders are charging up to £100 extra for this product over their core range, when the risk is no different. [They’re] effectively asking landlords to pay any tax saving from using a limited liability company structure to the lender instead” says Simon Bayley.
“The intermediary community is far too canny to go on selecting lenders who decide on this kind of pricing model. ... I am sure that market forces will dictate that this kind of overpricing will quickly disappear" he says.