What are the eligibility criteria and fees for CHL's limited edition 75% LTV tracker products?
Quick Answer
CHL's limited edition 75% LTV tracker products specify eligibility based on property EPC ratings (C or above) for specific rates, loan sizes, and a 1.5% product fee, requiring careful consideration of property condition and costs.
## Understanding CHL's 75% LTV Tracker Products: Eligibility and Costs
CHL's limited edition 75% LTV tracker products are specific offerings that cater to experienced landlords looking for higher leverage. Eligibility for these products typically requires an applicant to be an experienced landlord, usually defined as having 2+ years of letting experience. The property must also meet standard buy-to-let criteria, including an adequate rental income to satisfy the lender's interest cover ratio (ICR) stress test; for example, many lenders use a 140% rental coverage at a 5.5% notional pay rate. The applicant's credit history will undergo scrutiny, requiring a clean record with no recent defaults or bankruptcies. These products are often withdrawn quickly due to their competitive nature and limited availability, making swift action important for interested investors.
### Key Eligibility Criteria for CHL's 75% LTV Tracker Products
* **Experienced Landlord Status:** Applicants typically need to demonstrate a minimum of **2 years of active letting experience**. This means owning and managing at least one buy-to-let property for that duration. New landlords or those with less than two years' experience generally will not qualify for these specific products.
* **Acceptable Credit History:** A clean credit file is paramount. Lenders will perform comprehensive credit checks, and issues such as **County Court Judgments (CCJs), defaults, or bankruptcies within the last 3-6 years** are likely to result in rejection. This is a standard requirement across most specialist buy-to-let lenders.
* **Property Type and Condition:** The property must be a standard residential buy-to-let, in good condition, and readily lettable. Certain property types, such as Houses in Multiple Occupation (HMOs) with more than 5 occupants or mixed-use properties, might have different product criteria or be excluded from these specific 75% LTV offerings.
* **Interest Cover Ratio (ICR) Compliance:** The property's projected rental income must adequately cover the mortgage interest payments, according to the lender's stress test. While a common conservative example is 125% rental coverage at a 5.5% notional pay rate, many lenders, especially for higher LTV products, use a **140% or even 145% reference rate**. For example, a property generating £1,000 in monthly rent might need to service a notional mortgage payment of no more than £714 per month (1000/1.4 = 714).
### Associated Fees for CHL's 75% LTV Tracker Products
* **Product Fee:** This is the most significant upfront cost, typically ranging from **1% to 3% of the loan amount**. For a £200,000 mortgage, a 2% product fee would equate to £4,000. This fee can sometimes be added to the loan, but this increases the overall interest paid and is only possible up to the 75% LTV limit.
* **Valuation Fee:** A valuation fee is paid to the lender for their assessment of the property's value. This cost varies based on property value, but for a property valued at £250,000, it could be around **£300-£500**. This ensures the property provides sufficient security for the loan.
* **Legal Fees:** These cover the costs associated with the conveyancing process for the mortgage. Fees for a buy-to-let purchase or remortgage can range from **£1,000 to £2,500**, depending on the complexity and solicitor involved.
* **Broker Fees:** If using a mortgage broker, they may charge a fee for their services, which can range from a fixed amount of **£500 to £1,500** or a percentage of the loan amount.
### Investor Rule of Thumb
Always factor in all associated fees when calculating the true cost of a mortgage product, not just the interest rate, as high fees can significantly impact overall return on investment, especially for higher LTV products.
### What This Means For You
Understanding the specific eligibility and fee structure of products like CHL's 75% LTV trackers is crucial for making informed investment decisions. Most landlords don't lose money because they choose the wrong LTV, but rather because they don't fully account for all upfront costs and ongoing serviceability. If you want to refine your mortgage strategy and ensure you're selecting the most suitable products for your portfolio, this is exactly what we analyse inside Property Legacy Education.
Steven's Take
Limited edition products with higher LTVs, like CHL's 75% trackers, can be very attractive for growing a portfolio with less capital upfront. However, the 'limited edition' tag means they are often here today, gone tomorrow, so speed is key. More critically, the criteria for these products are usually tighter, particularly around landlord experience and credit history. While a 75% LTV sounds great for leveraging capital, you must stress-test your rental income rigorously against current ICR requirements, which can be 140% or even 145%. Don't just focus on the rate; the fees, particularly product fees of 1-3%, can make a substantial difference to your initial cash outlay and overall profitability. Always get clear figures for all costs involved.
What You Can Do Next
1. Review your landlord experience: Confirm you meet the 2+ years of letting experience requirement for specialist products by checking your AST start dates and previous mortgage statements.
2. Check your credit report: Obtain a copy of your personal credit report from services like Experian or Equifax to identify any potential issues before applying, and address any inaccuracies.
3. Calculate potential rental income and ICR: Use an online rent estimate tool or consult a local letting agent to estimate rental income, then use a lender's ICR calculator (or assume 140% at 5.5%) to pre-qualify the property's serviceability.
4. Engage a specialist buy-to-let broker: Contact a mortgage broker specialising in buy-to-let to discuss current product availability, eligibility, and a full breakdown of all associated fees for products that match your criteria.
5. Budget for all upfront costs: Create a detailed budget including product fees (e.g., 2% of loan), valuation fees (e.g., £500), legal fees (e.g., £1,500), and any broker fees, ensuring you have sufficient capital for the transaction.
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