New €200m buy-to-let mortgage fund targets property investors

A new €200 million buy-to-let mortgage fund is set to target property investors looking to either buy into the market or refinance their existing investment properties – and it even comes with a 10-year interest-only option.

The new product, from ICS Mortgages/Dilosk, is available to both individuals and companies, with variable rates starting at 4.49 per cent on a loan to value (LTV) of 50 per cent or less.

Access to mortgage finance for property investors has been limited in recent years, despite the uplift in values, as lenders concentrate on residential mortgage lending.

Dilosk chief executive Fergal McGrath said the product would appeal to established property investors with existing properties, those looking to refinance and expand their portfolios, and those wishing to buy their first buy-to-let property.

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Housing solutions

“A lack of access to mortgage finance for buy-to-let investors has been one element of our complex housing situation in Ireland,” he said, adding that a new stream of finance could play a positive part for the “long-term provision of affordable and quality accommodation solutions to meet the various needs of a range of tenants”.

Property investors can take out the mortgage over a five- to 20-year term, with a 10-year interest-only option, or 20-year capital-and-repayment option. ICS will offer the product with a loan to value of up to 70 per cent, based on a minimum loan size of €40,000 and a maximum loan size of €1.25 million. Properties must have a minimum value of €80,000, but there is no upward limit. Variable rates increase to 5.25 per cent on LTVs of 50 per cent or more on the interest-only option.

An application fee of 0.5 per cent of the amount of the loan (capped at €1,500 for buy to let investors) also applies.

Investors looking for a buy-to-let mortgage should note that there are restrictions, and if you’re looking to invest in a property outside the main urban areas, the product may not work for you. The company says it will only lend for properties in Dublin, (and surrounding counties Kildare, Wicklow, Meath, Louth), Galway, Cork and Limerick, and for properties in other urban centres with population greater than 10,000 people.

Irish financial services group Dilosk was created in 2014 with the acquisition of ICS Mortgages, including the brand, a portfolio of €223 million of mortgages and distribution platform, from Bank of Ireland. The lender is currently lending to its existing customer base through various top-up mortgages.