Irish mortgage lender First Active stepped backed into the market recently with the first European securitization of flexible buy-to-let mortgages. Called First Flexible No.2, the GBP300 million ($449 million) transaction was backed mainly by a portfolio of over 4,000 flexible buy-to-let mortgages originated by First Active, almost 70% of which were concentrated in London and the South East of England. J.P. Morgan acted as lead manager.
Flexible mortgages allow borrowers to prepay a part of their principal balance at any time - rather than traditional mortgage products where payments are paid to a fixed schedule - and those prepayments can also be used as a line of credit for borrowers at any point in the future. The outstanding balance on the mortgages used in this deal amounts to GBP296.1 million.