Buy-To-Let Lifetime Loan by Spry Finance
Spry’s Buy-To-Let (BTL) Lifetime Loan is a later life loan that allows you to release money from your investment or rental property, tax free, without having to sell it. You retain full ownership of the property and continue to receive your rental income. You can make monthly repayments if you choose to. You’ll get a long-term loan with a fixed interest rate that’s designed to last for the rest of your life. The fixed rate loan will usually be repaid from your estate or on the sale of your property.
Is the BTL Lifetime Loan a Lifetime Mortgage
Although the BTL Lifetime Loan does not meet the definition of a Lifetime Mortgage contained in the Consumer Protection Code, it operates in almost the same way.
– The main difference between a BTL Lifetime Loan and a Lifetime Mortgage is that it is secured against a property other than the borrower’s principle primary residence.
– As a result, borrowers and/or their family members will not have the right to permanently reside in the property.
– Customers of the Spry Finance BTL Lifetime Loan will receive all other protections as customers of our standard Lifetime Mortgage
Who is the product suitable for?
Spry’s BTL Lifetime Loan is suitable for customers that are:
– 60 years of age or older, if there are two applicants, the younger applicant must be aged 60 or older
– Own a residential investment or rental property in the Republic of Ireland
– Are resident in the Republic of Ireland
– Want to borrow a minimum of €50,000
– Maintain the upkeep of the property and keep it insured
It may not be suitable for customers that fall under the following criteria
– Intend to sell the property in the short to medium term and/or transfer the property to a family member or close relative in the short to medium term
– Do not intend to let the property into the future
– Use the property or intend to use the property as their principal private residence
– Let the property or intend to let the property to family members or close relatives
For your property to be eligible
– It must be of standard construction located in the Republic of Ireland
– It must have a minimum value of €225,000 outside of Dublin or €300,000 in Dublin
– It must be let out under a tenancy agreement registered with the Private Residential Tenancies Board (PRTB)
– It must have a maximum of two named owners on the deeds of the property
– It must not be lived in or, be intended to be lived in by you, the owner, or your family as a principle primary residence
– It must be mortgage free. If there is an existing mortgage or charge on the property, this must be cleared either from savings or from the proceeds of your BTL Lifetime Loan
– It must not be used by the tenants for any commercial purposes
– Certificate of Tithe must be confirmed by your Solicitor
– Home Insurance must be maintained at all times on the property
– All local property tax charges must be up to date
How much can I borrow?
The amount you can borrow depends on your circumstances, which include your age and the value of your property – See the table below
– Customers aged 60 may borrow up to a maximum of 15% of the value of their asset
– Customers over 60 may borrow one additional percent for every year of age (i.e. if you are 61 you may borrow 16%, if you are 62 you may borrow 17% etc.) up to a maximum of 40% for those aged 85 and older
– An adjustment will be made for any potential future Capital Gains Tax liability. This will be agreed with you on application
– In order to gain an accurate value of your property, an independent valuer will be appointed by Spry Finance
Calculation of the BTL Lifetime Loan amount
The Maximum Loan Size in each case is determined by using a maximum Loan to Value Ratio (“LVR”) according to the age of the younger nominated resident.
BTL properties may attract Capital Gains Tax, on any future gain associated with the property. Such tax can impact on the Maximum Loan Size of the BTL Lifetime Loan.
Confirmation of the original acquisition price will need to be provided by your Solicitor. To the extent that there is a potential Capital Gains Tax liability, we will adjust the maximum loan size accordingly. The table below summarises the range of LVR’s according to the age of the younger nominated borrower.
*Loan Limit means the percentage of the property’s value (adjusted for current Capital Gains Tax) that can be borrowed
Interest Rate
The interest rate is a fixed rate of 7.20% per annum, added to your loan monthly.
The rate may change during your application process, the Loan Offer is valid for 30 days after it is issued.
Optional Repayments
You can choose to pay up to 10% of the original loan amount per year to service the interest and manage the balance of your loan amount without incurring an Early Repayment Charge (ERC) should you wish to
– You can do this by making regular monthly direct debit repayments or by electronic payment
– Payments in excess of 10% of the original loan balance per year may result in an ERC
Full details of the ERC are provided in the Spry Finance Guide to a Lifetime Mortgage/Lifetime Loan, including details of exemptions to the ERC.
Advice
MyMortgages will advise you on the suitability or otherwise of a BTL Lifetime Loan for meeting your financial needs and objectives.
We strongly recommend that you seek additional financial advice from a qualified source about any possible effect that a BTL Lifetime Loan could have on any means-tested State benefits and other related matters.
You must seek independent legal advice from a Solicitor.
We strongly recommend that you discuss your intention to apply for a BTL Lifetime Loan with your family.