If you are considering a buy to let remortgage, refer to the table below to see the top ten products we can access today. Our table updates twice daily.
|Can I remortgage a buy to let to release equity?||If you have enough equity in your property, your income meets the affordability criteria of your new deal and you are releasing funds for a reason accepted by your lender this may be possible.|
|What is the lowest initial rate 75% LTV buy to let remortgage deal?||75% loan to value deals we can access are from 0.00% per annum.|
|What deposit is needed for a buy to let remortgage?||You don’t need a deposit to remortgage, the interest rate you can secure will be dictated by your loan to value. Experienced landlords can borrow up to 85% of the property value, subject to lender criteria.|
|I want to remortgage my property as a buy to let, can I?||We can look into the options available to you, it is a fairly common process, call us to chat it over.|
|Can I get a buy to let remortgage with a low credit score?||Your credit history is a factor for lenders, but the attitude towards your credit score will vary lender-to-lender. We may need to look at a recent credit report to assess your position.|
|How to remortgage a buy to let property.||Remortgaging a buy to let property starts with our advisors gaining an understanding of your wants and needs from your new deal. For example, you may simply be looking for a saving on your monthly repayments. Alternatively, if your property has increased in value, you may be looking to release some of the capital to invest in another. Our advisors will search the marketplace to identify the most appropriate product to meet your objectives, whatever they may be, and with your permission, will submit your application. We then work on your behalf to achieve completion as quickly and smoothly as possible.|
|I want to remortgage my buy to let: HMO, student let, limited company buy to let, SPV, LLP, ex local authority house, holiday let (delete as appropriate) can you help?||Commercial Trust is a specialist buy to let broker, we welcome any type of enquiry, straightforward or complex, we have the expertise in house to discuss a plethora of scenarios.|
You may be looking for stability in your monthly repayments, in which case a fixed rate deal could fulfil your requirements. This is the key advantage of a fixed rate deal. Conversely, it is important to remember that if mortgage rates go down and you have fixed rate, you will not benefit from this change.
Fixed rates commonly start from an initial period of 2 years:
Many investors are unaware that it is currently possible to secure up to ten-year initial rate period deals:
Since the tightening of affordability calculations, brought about by the Prudential Regulation Authority (PRA) in January 2017, some landlords have looked to 5-year fixed rate remortgage deals to resolve their borrowing. This is because the tighter affordability calculation does not apply to 5 year fixed rate deals.
A small number of lenders offer “pay rate” deals, where the calculation they use to assess whether the borrowing is affordable is not as strict. This offers some landlords to borrow more than they would on other deals.
When the PRA imposed stricter rules on buy to let borrowing, they did so to protect landlords from financial vulnerability.
They wanted lenders they regulate to make sure landlord borrowers had a cash buffer of disposable income so that repayments would remain affordable, in case they increased for any reason.
A buy to let remortgage fixed over 5 years offers the borrower a degree of financial security on its own merit, by the simple fact that there is the assurance repayments cannot rise for at least five years.
For this reason, the tighter affordability calculation was not imposed on 5-year fixed rates, which may mean you can borrow a larger sum of money over five years than you can over two, for example.
A Tracker buy to let mortgage directly relates to another rate, for example the Bank of England base rate. The fluctuation of tracker rates is outside the control of the lender.
The lender manages Variable rate mortgages. Lenders offering variable mortgages can change the rate according to a range of factors affecting their business.
The pros and cons of these type of product hinges on the fact that the rate is subject to change. Where the rate is low, the cost of monthly repayments are low, but, when they are high, the reverse is true, which is clearly vital to your decision to secure one.
If you want to avoid lender fees or generally keep upfront costs low, tell your advisor when you are discussing your priorities. Our broker fee will still apply, but there are products available where upfront costs can be kept as low as possible.
Where a buy to let remortgage with no fees from the lender is not available, it may be possible to add the fees to your loan, be aware that this may have implications for the overall cost of the borrowing over the term.
Why paying a lender fee may be advantageous
Selecting a deal with no lender fee may save you money on upfront costs; however, it is important to look at the full picture.
Deals with a lender fee may offer a cheaper rate, which when repaid over time may result in a greater overall saving, and this could mean a difference of thousands of pounds to you.
If you pass your renewal date without pursuing a buy to let remortgage, your repayments are calculated based on a default rate of charge determined by your existing lender.
Most commonly, this is the lender’s “Standard Variable Rate” (SVR), but on some occasions, it may be another variable rate stipulated by your lender (see your mortgage documents for details).
Regardless of which it is, the reverting rate will always be a variable one, which means it (and your repayments) can go up or down.
How the lender reverting rate may affect you
If the lender reverting rate is:
Higher: your repayments become more expensive
Lower and you cannot get a cheaper deal: your repayments become cheaper, but you are vulnerable to rates changing
Lower, but other deals are even cheaper: your repayments become cheaper, but you may be able to secure an even bigger repayment reduction with a different product.
The sensible option is to remain informed, which is where a buy to let remortgage review can equip you with the details you need.
Many lenders will only work with an intermediary, which means that you could only access their deals by working with a company representing you.
For this reasons, and many more that we aim to demonstrate to you, securing a buy to let remortgage deal with our mortgage advisors should put you at an advantage.
Borrowing as a portfolio landlord, (defined by the Prudential Regulation Authority, PRA, as those with more than 3 rental properties, irrespective of whether all of the properties are mortgaged), changed in 2017. The PRA tightened the rules around the underwriting of new borrowing for this type of borrower.
If you are about to remortgage buy to let property and you own more than three rental properties, you need to prepare for these changes.
The PRA brought in tighter underwriting measures for portfolio landlords in order to ensure that those with more complex cashflows were adequately assessed, to ensure repayments on new borrowing remained affordable.
This picture of affordability has to demonstrate that you would still be able to afford repayments if your financial picture changed, whether that be a change in your own financial circumstances or a change in mortgage rates.
This means that, when you come to remortgage one or a number of your buy to let properties, you may find that the amount you are able to borrow is different to the figure you were expecting. It also means that you may be asked for a lot more information about your properties and finances at application.
Regardless, you should still expect that your Commercial Trust mortgage advisor will dedicate themselves to finding you a great deal that will fulfil your needs and fit your circumstances. In addition, you will be represented by one of the mortgage administration team here, who will coordinate with the various parties to get you through to completion as smoothly as possible.
If you have fewer than four rental properties, and are looking to remortgage buy to let property, changes brought about by the PRA may impact you. The objective for the changes the PRA has instigated is to better protect landlords from financial vulnerability in the event of a change in circumstances.
This means that, where previously a lender may have had to establish that you could afford monthly repayments based on securing a rental amount that covered the mortgage repayment amount by 125%, they now have to apply a higher hypothetical rate of, typically, 145%.
Similarly, and to supplement this buffer of affordability, a lender uses a hypothically higher rate than the one you will pay, to further test the affordability of the deal you are applying for.
These measures to assess affordability have always been in place, the change has been the extent to which the lender must “stress” the calculation.
Comparing buy to let remortgage deals should be done with the full picture of options in front of you, including the terms your existing borrower can offer. However, don’t make the mistake of assuming your own lender can definitely beat all others in the marketplace simply because you are an existing customer of theirs, this may or may not be the case.
Your situation and goals may have changed since you last applied. You may have amassed a healthy amount of equity in your rental property, a nearby development may have accelerated local price growth. Perhaps local rents have risen, and improvement work could unlock your property’s earning potential.
Your current product may have features or terms that at first seemed appropriate, but turned out not to be. It could be that you had enough cash flow to reduce your loan, but you were not able to make overpayments. Or maybe you wished to sign a long-term tenancy agreement, but your lender’s criteria prohibited it.
Remortgaging to raising capital? Consider the pros and cons of equity release
Property values trend upwards over the long term, and asset wealth can be an excellent source of cash. In fact, capital raising is an important part of many investors’ strategies.
Equity is an illiquid form of wealth (i.e. it is money you have access to, but cannot easily access in the same way you can access money in the bank). You might feel that your money could perform better when not tied up in property. Instead, you could use a buy to let remortgage to raise capital to expand your property portfolio, diversify your assets, improve your properties or pay off other debts. To investors, flexibility is the main draw of equity release.
But a larger loan means higher monthly repayments and a larger total interest bill. If borrowing more means increasing your loan to value (LTV) ratio, you may face tougher conditions and higher rates. And if you struggle to meet the repayments, your lender could repossess your property.
You must strike a balance based on how much you stand to gain and lose by raising capital against your property. Discuss your intentions with your advisor to ensure that you get the most appropriate recommendation.
Commercial Trust is a specialist in our field, we only deal with the financing of rental properties. For this reason you can expect the very best expertise in terms of knowledge of available deals and understanding of associated criteria when working with one of our team to identify a buy to let remortgage solution.
Your mortgage advisor will recommend a deal that is both cost effective and appropriate to your circumstances.
To secure a decision in principle from a lender as quickly as possible, it will help your advisor if you have the following information to hand:
On some cases, an application won’t conform completely to the lender’s criteria, but will be strong enough to merit referral to an underwriter who will take a closer look at the detail of the deal. Your advisor will take care of this on your behalf.
Throughout the application and in addition to your mortgage advisor, you will work with a member of our mortgage administration team, they work hard to alleviate as much of the daily grind involved in pushing a deal through to completion.