Following the rise in the interest rate by the Bank of England, commercial mortgages for buy-to-let landlords are likely to be more expensive. There are steps that landlords can take to make sure that they are on the best interest rates they can get.
When a fixed interest rate mortgage deal comes to the end of its fixed rate period, the interest charged will probably increase. Landlords can talk to a mortgage broker who may be able to find a cheaper rate from another lender. If the borrower remortgages at a cheaper rate and the fixed interest period is coming to an end, the borrower will probably not be charged early repayment fees.
If a landlord does decide to remortgage, there are a number of choices to be made, such as tracker mortgages, fixed-rate, variable rate and interest only mortgages. Thanks to the cuts to tax relief on mortgage interest payments, interest only mortgages are not as attractive as they once were.
If you go for the cheapest rate, you may not save money in the long term as these mortgages often come with hefty fees. The bigger the mortgage, the less the fee will affect the total amount borrowed.
A mortgage broker will have relationships with a wide range of lenders and can provide expert advice on switching mortgages and arranging new mortgages. The broker will do their utmost to make sure landlords are not paying more interest than they need to.