What is a Buy to let Remortgage?
A Buy to Let Remortgage refers to changing your existing buy to let mortgage with a new deal either from a new or existing provider. Buy to let mortgages are specifically for landlords who purchase a property and pursue a return on investment by renting it out to tenants.
The reason for getting a Buy to Let Remortgage is commonly to find a better deal. Most mortgages start with an introductory deal, which offers a discount rate for the first 3 to 5 years. But when this period expires, the interest rate charged moves to the standard variable rate (SVR) which is higher than the average interest rate. Therefore, getting a new deal or ‘remortgage’ can help you save money by paying better interest rates.
Buy to Let Remortgage Comparison
Quiddi Compare is pleased to offer a full comparison service for Buy to Let Remortgages. We work with some of the leading mortgage providers in the UK to help you find the best Buy to Let Remortgage deals.
By applying through a comparison site, you are able to see a number of deals at once and you can choose the best product for you. Our handy Mortgage Rate Tool allows you to fill in a few basic details about your property and credit rating and you can receive some market beating quotes in seconds.
Buy to Let Remortgage – What are the advantages?
The most popular reason for getting a Buy to Let Remortgage is to take advantage of better deals available. Mortgages are transferrable so can easily be moved to another product with the same company or a different provider. This includes taking advantage of introductory periods and other bonuses such as cash back and nectar points.
Whilst most Buy to Let mortgages are interest only, if your existing arrangement is a fixed rate or tracker mortgage that rely on the [Bank of England]/http://www.thisismoney.co.uk/money/news/article-1607881/When-UK-rates-rise.html base rate and this rate falls, you will certainly save money by switching mortgages.
If you’re a landlord looking to consolidate your debts or raise capital to perhaps invest further in the property, the rates you pay on a mortgage are potentially less in the long run that what you would pay for other personal loans.
Furthermore, if you wish to repay your mortgage early but find that you have an early repayment clause in your mortgage agreement, remortgaging may allow you to repay earlier and cost you less for doing so.
Buy to Let Remortgage – am I eligible?
To be eligible for a Buy to Let Remortgage, you must obviously have an existing Buy to Let Mortgage in place. Landlords are limited to a maximum of 3 buy to let mortgages and you cannot borrow more than £2 million in total.
By Remortgaging, you are essentially applying for a new loan and your financial circumstances may have changed since you applied for your first hand mortgage. Therefore, to be eligible, mortgage providers will need to review your credit rating and how well you have been paying your existing mortgage. If you have a poor record of keeping up with mortgage repayments, you may not be eligible for a remortgage or you may have to pay a higher interest rate to manage the risk of default.
Also, the mortgage lender will need to assess the rent you currently receive from tenants and also expected rent. This will play a role into how much you can borrow and what your Loan to Value (LTV) will be.
Important information about Buy to Let Remortgaging
For a Buy to Let Remortgage, it is uncommon to receive a Loan to Value (LTV) of more than 75% as the best deals typically provide a maximum of 60% LTV or less. This means that you need to have at least 40% deposit of the property’s value.
When it comes to remortgaging, you really need to think about the costs involved with getting a new mortgage. Whilst there are savings to be made by switching to a cheaper deal, you really need to weigh this up with the other costs. For instance, there are extra fees involved with getting a remortgage such as legal and survey fees.
Taking these costs into consideration, you need to think about your long-term investment as a landlord. You will need to think about what will happen if you do not receive rent or if the value of property depreciates over time and how this will affect your bottom line.
Finally, if you are unable to keep up with the Buy to Let Remortgage repayments over a long period of time, your property can be at risk of repossession.
The advertised rate is 1.95%. However this rate will not be available to everyone and will depend on your individual circumstances and the loan to value ratio of your mortgage.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Some partners may charge you a fee for helping you find a Mortgage or Secured Loan or other services they provide. MAKE SURE you check with the company before agreeing to any service if they charge you a fee and what the terms are.
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk QuiddiCompare does not charge a fee and does not provide any financial advice relating to mortgages. However we may on occasion receive commissions from IFA’s and mortgage providers, brokers and intermediaries for introducing you to them.
The content of this site is meant to be informational, and it should not be considered financial advice. – See more at: quiddicompare.co.uk/mortgages