9.—(1) The annual percentage rate of charge must be calculated in accordance with the mathematical formula set out in paragraph 20.
(2) The costs of opening and maintaining a specific account, the costs of using a means of payment for both transactions and drawdowns on that account and other costs relating to payment transactions shall be included in the total cost of credit to the borrower whenever the opening or maintaining of an account is obligatory in order to obtain the credit or to obtain it on the terms and conditions marketed.
(3) The calculation of the annual percentage rate of charge must be based on the assumption that the consumer buy-to-let mortgage contract is to remain valid for the period agreed and that the creditor and the borrower will fulfil their obligations under the terms and by the dates specified in that contract.
(4) If the consumer buy-to-let mortgage contract allows variations in the borrowing rate and, where applicable, in the charges contained in the annual percentage rate of charge but unquantifiable at the time of calculation, the annual percentage rate of charge must be calculated on the assumption that the borrowing rate and other charges will remain fixed in relation to the level set at the conclusion of the contract.
(5) Where applicable, the additional assumptions set out in paragraph 21 must be used in calculating the annual percentage rate of charge.
(6) In this paragraph—
“annual percentage rate of charge” means the total cost of the credit to the borrower, expressed as an annual percentage of the total amount of credit, where applicable, including the costs referred to in sub-paragraph (2) and equates, on an annual basis, to the present value of all future or existing commitments (drawdowns, repayments and charges) agreed by the creditor and the borrower;
“total amount of credit” means the ceiling or total sums made available under the consumer buy-to-let mortgage contract;
“total cost of credit to the borrower” means all the costs which the borrower is required to pay in connection with the [F1buy-to-let mortgage contract] and which are known to the creditor, including the costs referred to in sub-paragraph (7) but excluding the costs referred to in sub-paragraph (8).
(7) The costs referred to in this sub-paragraph are—
(a)interest;
(b)commissions;
(c)taxes;
(d)any other kind of fees;
(e)the cost of valuation of property where such valuation is necessary to obtain the consumer buy-to-let mortgage contract; and
(f)costs in respect of ancillary services, in particular insurance premiums, where the purchase of those ancillary services is compulsory in order to obtain the consumer buy-to-let mortgage contract or to obtain it on the terms and conditions marketed.
(8) The costs referred to in this sub-paragraph are—
(a)notarial costs;
(b)registration fees for the transfer of ownership of the property; and
(c)any charges payable by the borrower for non-compliance with the commitments laid down in the consumer buy-to-let mortgage contract.
Textual Amendments
F1Words in Sch. 2 para. 9(6) substituted (31.12.2020) by The Mortgage Credit (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/656), regs. 1(2), 8(1)(a)(2); 2020 c. 1, Sch. 5 para. 1(1)
Modifications etc. (not altering text)
C1Sch. 2 para. 9(2)-(4): power to amend conferred (31.12.2020) by The Mortgage Credit (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/656), regs. 1(2), 14; 2020 c. 1, Sch. 5 para. 1(1)