Helping Buy to Let Landlords get the best remortgage deal
If your buy to let fixed or tracker rate is due to end soon you could benefit from remortgaging onto a new deal. This could be via a product transfer with your current lender or remortgaging over to a new lender. Either way our experienced brokers are here to help you.
If you start the process of obtaining a mortgage a month or so before your current deal ends there should be enough time to get the new mortgage ready. This means your new arrangement can start when the current deal ends and you won’t be charged for any time on the reversion interest rate.
As well as potentially lowering your interest costs, a remortgage could also allow you to release equity for further property investments.
Why remortgage a buy-to-let?
There are many of reasons why landlords choose to remortgage.
- For a deposit
- Save money each month
- For property improvements
- Debt consolidation
- Buying out a partner
- Paying a tax bill
Remortgage to save money each month
As with other types of mortgages, a buy to let mortgage will have an interest rate product (fixed/tracker etc) which lasts for a fixed amount of time.
When this ends your interest rate will ‘revert’ to the lenders Standard Variable Rate (SVR) or equivalent which is generally higher than other deals available.
With a remortgage you can search for the best buy to let deals and move your mortgage to a new lender.
Our buy to let mortgage brokers can help you to search the entire market and compare the best deals.
Remortgage a buy to let to release equity
Remortgaging a buy to let is a convenient opportunity to consider releasing some equity. Most mortgage lenders will allow this but the amount available can depend on what you will use the extra funds for.
You may wish to remortgage a buy to let property to fund a deposit for a further purchase. This is quite common and most lenders will be happy with this.
Releasing equity to pay for improvements to your rental property is another popular option. Depending on the level of improvements this could also raise the capital value of your property and allow you to charge more rent each month.
If you are looking to grow your property portfolio you may be classed as a portfolio landlord if the number of rental properties owned exceeds 4.
Unlike a purchase mortgage, there’s no need to pay a cash deposit when remortgaging.
You should be aged 18-75 with a minimum income of around £25,000pa. Proof of income will be required via P60, payslips, accounts or SA302 Tax Calculations. A good credit score is recommended!
Can a Limited Company remortgage a buy to let?
Yes this will be fine.
Can I remortgage my home on to a buy to let?
This is known as a let to buy mortgage and is widely available.
If you commercially let out a property that has a standard mortgage associated with it you are in breach of your mortgage agreement (and probably your insurance) unless your lender provides a consent to let.
The other option is to switch lenders by remortgaging onto a buy to let product that allows letting on a permanent basis.
Let to buy mortgages will also allow you to move home but keep the property you live in now.
- Apply for a Let to Buy mortgage for your current home. Usually this involves increasing the amount borrowed to release equity for the purchase
- Apply for a residential mortgage that allows you to buy a new home to live in
What about bridge to let mortgages?
Bridge to let mortgages are a finance package designed for property developers and investors. They include two types of loan with one lender:
- A bridging loan – This is used for the property purchase and can be used for auction purchases and run down houses.
- A buy to let remortgage – Once the house is renovated this mortgage pays off the bridging loan, leaving you with a pre-approved buy to let mortgage.
Read more on bridge to let mortgages.
Will the 6 month mortgage rule affect me?
The six month mortgage rule does apply to buy to lets. So if you have owned the property for less than 6 months your mortgage choices will be limited. We do have solutions for investors who find themselves in this position.
Read more on the 6 month mortgage rule.
Why use Drake?
- We have been brokers, advisers and property owners since mainstream buy to let arrived in the UK
- As property investors and landlords ourselves we know the upsides and downsides to owning and renting property
- We are independent mortgage advisors, giving you maximum choice from both the high street lenders and specialist lenders
- We work for you so our advisors will do all they can to ensure a successful outcome
- We like problems! If your situation is a little tricky or not quite ‘the norm’, this is fine by us. We will try to help and provide strategies