Buy-to-Let Remortgages
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Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
05.11.2024
Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
05.11.2024
How to Get Buy-to-Let Remortgage Deal for You
The key to getting the best buy-to-let remortgage deal lies in understanding your property’s equity, considering your financial position, including your ltv, and choosing the right lender for your needs. Compare different mortgage offers, scrutinise the fine print, and don’t shy away from seeking advice from a broker to ensure you secure the most competitive rates.
As a specialist broker, we at Ascot Mortgages have access to the best available deals, including those exclusive to mortgage brokers and private lending deals that aren’t publicly advertised. We offer a free initial consultation, where we outline different options based on an appraisal from across the market. Our team takes the time to identify the deal that’s best for you.
What is a Buy-to-Let Remortgage?
A buy-to-let remortgage, often abbreviated as BTL remortgage, is essentially a new mortgage deal that replaces your current one on a property you rent out. It allows landlords to either switch to a better mortgage deal with a lower rate, borrow more money against their property or release equity tied up in their rental home.
Kevin Gibson, a representative of Ascot Mortgages, remarks, “There are a number of companies that offer so-called independent mortgage advice. However, they nearly all have some allegiance with one provider or another. Here at Ascot, we are dedicated to treating every potential mortgage applicant with the time and commitment they deserve. We select buy-to-let remortgage deals based on the criteria of our customers.”
According to a spokesperson for monetary advice website unbiased.co.uk, “If you are looking to remortgage your buy-to-let property, you should seek help from a professional mortgage adviser. But don’t leave it too late as you cannot be sure whether good deals will still be available in a few months’ time.”
A mortgage adviser can recommend the best deals for you by scanning the whole of the market and will only suggest a mortgage that suits your individual circumstances. It’s worth regularly reviewing your mortgage to ensure that you are constantly on the right deal, which is what Ascot Mortgages can do for you.
Ascot Mortgages offers free initial financial advice and prides itself on delivering a simple, fast, hassle-free service. We search the whole of the market for you to ensure that you get the best deal for your needs and circumstances.
When Should You Remortgage a Buy-to-Let?
Timing is a crucial aspect of securing a BTL remortgage. It’s beneficial to switch your mortgage deal when your existing introductory rate is about to end, or if the standard variable rate (SVR) you’ve moved onto is high. Moreover, if the value of your property has risen significantly or if you’re looking to release equity, remortgaging can be a smart move.
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Do You Need a Deposit for a Buy-to-Let Remortgage?
Unlike buying a property, you don’t typically need a cash deposit to remortgage. However, the amount of equity you have in the property acts as a ‘deposit’ in a way.
Accessing Equity by Remortgaging
Equity is the portion of your property you own outright. A remortgage allows you to unlock the value tied up in this equity, providing funds that can be used for a range of purposes, such as investing in more property, making home improvements or paying off other debts.
Selling Your Buy-to-Let to Access Equity
Another way to release equity is by selling your property. However, this is typically a more drastic step and may not be the best solution if you want to maintain your rental income.
Alison Gibson
Ascot Mortgage Expert
Remortgage
Remortgaging is applied when you keep
living in your present property while applying for another mortgage deal with a new lender. Before finding out how to remortgage and get the best offers from experts like Ascot Mortgages, you have to check meeting what parameters of the deal that can help you succeed the most. The range of background factors varies a lot — from the recently changed loan-to-value ratio or your existing agreement coming to an end.
Whether you are trying to get a more beneficial deal or searching for funding to improve your home conditions, remortgaging is one of the most advantageous scenarios to consider.
How Do Interest Rates Work When Remortgaging a Buy to Let Property?
When it comes to remortgaging, the interest rate is a vital factor. A lower buy-to-let remortgage rate can reduce your repayments, making your investment more profitable. However, it’s essential to consider other factors like the overall cost of the mortgage and the fees involved in switching, and the ltv ratio to ensure the deal aligns with your financial goals.
What Are the Fees You Pay When Remortgaging a Buy to Let Property?
Remortgaging isn’t without its costs. Let’s delve into the main fees you’ll encounter when you remortgage a buy-to-let property.
Arrangement Fees
These are charged by the lender to set up your new mortgage. While a deal might have a low-interest rate, a high arrangement fee could make it less competitive overall.
Valuation Fees
Before approving your remortgage, lenders will want to assess the value of your property. This usually requires a valuation fee, although some lenders may offer this service for free as part of the mortgage deal.
Legal Fees
You’ll typically need a solicitor to carry out the legal work associated with remortgaging. Some lenders might offer a free ‘standard legal service’, but this can sometimes be slower than hiring your own.
Early Repayment Fees
If you leave your current mortgage deal before the agreed end date, you may have to pay an early repayment charge. It’s crucial to factor this cost into your calculations when deciding to remortgage.
In conclusion, a buy-to-let remortgage can be a lucrative tool for landlords to unlock better rates or release equity. It’s essential to understand your financial standing, including your ltv, keep an eye on the property market, and consider the associated fees to ensure you make the most of your investment. Happy remortgaging!
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FAQ
There are several potential benefits to remortgaging a buy-to-let property. One of the primary reasons landlords choose to remortgage is to secure a better interest rate, reducing the monthly repayments and potentially increasing rental profits. Remortgaging can also offer the opportunity to release equity from the property, which could be used for refurbishments, to repay debts, or to fund the purchase of additional properties. It’s worth noting that there could also be possibilities of raising equity with the current lender via a Further Advance. This option doesn’t always necessitate a remortgage, providing an additional pathway for landlords to access funds for their various needs.
Absolutely, once you’ve released equity from your property through remortgaging, you’re free to use it for almost any purpose. This could be to make improvements to the property, pay off debts, fund a child’s education, or even to invest in a new buy-to-let property. It’s worth noting, however, that the lender may ask about your intended use of the funds as part of their affordability assessment.
Yes, you are not obligated to stick with your current lender when remortgaging a buy-to-let property. In fact, it’s often beneficial to shop around and compare deals from different lenders. Switching lenders might allow you to take advantage of better interest rates, more favourable terms, or a product more suited to your specific needs.
Technically, yes, it is possible to remortgage multiple buy-to-let properties at the same time. However, the process can be more complex and time-consuming than remortgaging a single property. Each property will need to be individually assessed, and the lender will look at the overall risk of lending across multiple properties. It might also make you a ‘portfolio landlord’ according to the criteria set out by the Prudential Regulation Authority, which could mean more stringent affordability checks. Always consult a mortgage advisor or broker to understand the best way to approach this based on your individual circumstances.
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Legal
Ascot Mortgages authorised and regulated by the Financial Conduct Authority and can be found on the FCA register (www.fca.org.uk) under reference 776062. The FCA do not regulate some forms of mortgages. The guidance and advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate it will be £599 per mortgage account. Ascot Mortgages Ltd give you the option to pay a non-refundable fee of £1299 payable with the application. If this option is taken, Ascot Mortgages Ltd will refund any procuration fee received by the lender.
Ascot Mortgages Limited is registered in England and Wales and have their registered office at 8 Webster Court, Westbrook, Warrington, WA5 8WD. The company’s registration number is 06764971.
We are a credit broker, not a lender. We work with the whole of the lending market. We may receive commissions that will vary depending on the lender, product, or other permissible factors. The nature any commissions model will be confirmed to you before you proceed.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT
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