Rent to Buy Scheme

The Rent to Buy Scheme provides up to 100% of the finance required to purchase your property through a simple combination of a traditional mortgage topped up by the Bank's equity stake. The scheme is simple to complete and straightforward to process.

Our Rent to Buy Scheme may allow your organisation to benefit from:

  • The security of owning your own property;
  • Protection against the possibility of large rental increases; and
  • An asset - your equity builds up month on month in the property as the mortgage is repaid and it could actually increase further with any rises in market value. You can also buy back the Bank's equity stake at any stage.

Is it for you?

Purpose This product provides up to 100% funding support to enable established organisations to acquire their own premises. Loan support is normally limited to 75% of Market Value with the Bank also holding an equity stake in the property at the outset of up to a maximum of 25%. Customers are able to purchase the equity from the Bank in stages over time.
Borrower Normally registered charities and social enterprises.
Amounts The normal maximum individual facility is set at £0.4m. Split £0.3m by loan and £0.1m by equity.
Loan to value Up to 100%.
Term 5yrs to 25yrs (normally subject to mutual 10 year "breaks").
Interest Margin Variable Loan: Typical margin: Base** +1.5% to Base + 3% (minimum 4% p.a.). Equity Payment: 12% p.a..
Fixed Loan: Available for up to 5 years (subject to availability).
Capital Repayment Holiday Not available.
Fees Typically 1.5% of the amount of the loan advance. NOTE - All Legal and Valuation Fees to be borne by the applicant.
Security Usually a First Legal Charge over the freehold or leasehold property. Where the property is leasehold, it must have more than 35 years unexpired upon repayment of the facility.
Financial Covenants We would expect retained surplus + interest + depreciation (+ tax) to cover loan interest and repayments by at least 100%.
Requirements We would normally expect Unity Trust Bank to provide main bank relationship.

** Base + Bank of England Base Rate.


For more information on the Rent to Buy Scheme simply: