Buy to let remortgage

Remortgaging should be considered periodically as part of a regular review of your buy to let mortgages.

A buy to let remortgage might be appropriate in the following circumstances:

• To raise capital from a mortgaged property
• To raise capital from a mortgage free property
• To get a lower mortgage interest rate

Buy to let mortgage deals may have redemption penalties for the first few years. At the end of a fixed or discount period the penalties will probably end. This is a good time to review your mortgage.

Check out these buy to let remortgages here.

Comparing buy to let remortgage deals 

When comparing buy to let remortgage offers think about your future objectives.

• How would you want the remortgage loan structured, interest only or repayment? 

An Interest only loan will minimize your mortgage payments but will not pay off your mortgage. This type of loan might be suitable if you intend to sell the property after a period to realize a gain.  Alternatively you may have other investments running alongside which will ultimately clear the loan. 

A capital and interest loan will clear your mortgage over the mortgage term. This type of mortgage might be suitable if you are buying property as a form of retirement income.

• Will you want to sell or remortgage in the short term 

A remortgage scheme with short or no redemption penalties may be the answer. If your plan is to build a portfolio of buy to let properties, then you will want to be able to release equity to fund future purchases.

• Will you want to release equity in the future

How soon in the future. Does the new lender permit further advances.

• Do you want the security of a fixed rate over the next 2, 3 or 5 years, or are you happy for the interest rates (and mortgage rates) to fluctuate.

You may prefer the security of a fixed rate, but you are likely to pay more for that protection. Fixed interest rates are generally higher than discounted rates. Fixed interest rates mortgages will also have redemption penalties during the fixed period.

• Do you want the facility to make overpayments

Several mortgage schemes now offer the facility to make overpayments. What type of overpayments are these likely to be; lump sum or monthly overpayment.

• How much money do you want to raise

You may be able to remortgage for up to 75% of value. This figure may be limited by the rental income. Lenders use different calculations to assess the maximum loan. Please phone to discuss with an advisor. The capital raised could be used to fund another property purchase.

• Check you are eligible.

Lenders use different criteria for assessing applicants. Some base their lending decision on earned income, others purely on rental income.

Some lenders are currently offering fee assisted remortgages. Please contact us for an up to date assessment of the mortgage market.

As independent mortgage brokers we are in a good position to assist in the choice of scheme.

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