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Guide to Buy-to-Let Remortgages

Landlords Nationwide compare buy-to-let remortgage products with our mortgage advisers. You too can save money when you compare buy-to-let remortgage rates with quotes from some of the leading mortgage providers in the UK.

The rules around landlord finance may have changed since you purchased the property. Lenders have implemented new rental stress tests, portfolio-wide stress tests, minimum EPC scores and more obstacles.

With Bespoke Finance you can apply online for a free enquiry and receive advice from mortgage advisers specialising in property investment finance.

Helping landlords rent out properties, get better mortgage rates and release equity since 2009.

Who should not remortgage?

We can look at all situations and advice where best to proceed. We have advised clients to stay with their current lender if they are on a legacy mortgage product that is very competitive compared to today's products.

In such cases, we have also advised 2nd charges to release equity for the client to retain the existing great 1st charge deal.

When I remortgage can I change the term?

Yes - We can help you remortgage and increase the mortgage term. The term of the mortgage is often limited by your age and the lender's criteria. Some mortgage lenders go up to 110 years old at the end of the term, with a minority having no age limit.

Can I remortgage my buy-to-let as a pensioner?

Mortgage lenders typically a maximum age from 69 to 80, we do have a few exceptions going higher to 89 at application. Others calculate from the lowest age of the applicant - often bringing on a younger relative can open options.

Can I remortgage my buy-to-let when unemployed?

Yes - the rental income of your buy-to-let property is often enough to give the lender confidence. They will want similar confidence that you can maintain your lifestyle and cover potential void periods.

Can I remortgage my buy-to-let on maternity leave?

Yes - if you plan to go back to work on a similar income. We have mortgage lenders that will consider future circumstances. Given the rental income, this will typically provide the lender with the confidence of affordability over this period.

Can I remortgage my buy-to-let to release equity?

Yes - we can help you remortgage your buy-to-let property or portfolio to release equity for any legal means. The maximum equity can release will depend on the maximum loan to value and minimal loan caps.

Can I remortgage my buy-to-let to pay off debt?

We can help you with debt consolidation remortgages. There is a lot to consider if this is a good or bad thing given your circumstances and you should seek advice.

Can I remortgage my buy-to-let property early?

Yes - Unfortunately some mortgages come with "Early Repayment Charges". These are often only required if you are remortgaging within the initial promotional term. Such as remortgaging six months into a 2-year fix.

Can I remove someone on the mortgage when remortgaging?

Yes - this will depend if you alone will meet the lender's criteria, without the need of the other applicant. As one person is selling their share of the property to you, there may be SDLT to consider.

Can I add someone on to the mortgage when remortgaging?

Yes - You can change the ownership structure of a property owner on remortgage. There may be SDLT to consider on the part-sale of the property to another person.

You have a few options when remortgaging - some lenders offer a "free legals" products. Unfortunately, these can result in higher interest rates than mortgage products without the offer.

Product Switches often do not have any legal fees to pay.

The legal fees for remortgages are often a lot lower than legal fees for purchasing though they both often depend on the value of the property. We can obtain you a quote to compare.

Will I pay Stamp Duty?

No - typically on a remortgage there is no stamp duty to pay. It may be different if you are changing ownership, such as removing someone from ownership of a property or bringing in someone as a joint venture.

What about further advances, simpler?

Yes - some mortgage lenders (your existing lender) offer a further advance, allowing you to obtain a new rate and release equity from your property.

Lenders treat further advances differently - in general, it is less paperwork, but they may require a re-valuation and full application to check against current criteria.

Unfortunately, further advance products may not be as competitive as other lenders, or the lender's remortgage products themselves.

What about rate switch, simpler?

Yes - some mortgage lenders (your existing lender) offer a rate transfer or product switch. Allowing you to obtain a new mortgage rate and move away from the mortgage lenders SVR.

Lenders treat product switches differently - for many, they do not revalue the property or complete new stress tests or recheck you via there current criteria.

Unfortunately, product switch products may not be as competitive as other lenders, or the lender's remortgage products themselves.

... read more on What about rate switch, simpler?

What deposit is needed?

You often do not need any additional deposit. You will already have this in the property, now known as equity.

The house price may have increased since you purchased it, increasing the equity. Giving you lower LTV remortgages or some landlords choose to release this equity (to invest in further properties, renovate, etc..).

If the house price has decreased, this has eaten away at your equity. Meaning a higher LTV remortgage may be required.

The maximum LTV for a buy-to-let remortgage is 85% of the property value (15% equity required). If your LTV is higher than this, you may not be able to remortgage without investing more money.

The rental amount can limit the maximum remortgage loan amount achievable, requiring more substantial equity investment.

Our mortgage advisors can help you look at your overall position if that is to invest further or release equity.

What is a buy-to-let remortgage?

You use a buy-to-let remortgage when you already own residential property but want to refinance it and rent it out.

Landlords do this when the initial mortgage term has come to an end, to release equity. Or to get better mortgage rates often moving away from the lenders higher Standard Variable Rate (SVR).

Others are homeowners who want to rent out their current residence, changing the mortgage to a type that allows renting to others.

Are Buy to Let Mortgages Regulated?

The Financial Conduct Authority (FCA) does not regulate most types of buy-to-let mortgages.

There are exceptions known as "consumer buy-to-let". Such products are if you are to rent the property to a close family member. (e.g. spouse, civil partner, child, grandparent, parent or sibling).

Regulated Buy-to-Let mortgages have stricter affordability rules similar to a residential mortgage.

Are buy to let mortgages interest only?

The trend for buy-to-let mortgages has been to go for Interest Only.

With the Government recently removing mortgage interest relief. It can be in your best interest to look at repayment or part-repayment buy to let mortgages. To give you better returns on that investment over the years.

Landlords looking to expand their portfolio may prefer interest-only mortgages. Allowing lower payments, to save for further deposits for further properties, giving higher returns. Known as leveraging.

Whatever your plan our mortgage advisers can obtain for your repayment, part-repayment, interest-only and offset buy-to-let mortgages.

... read more on Are buy to let mortgages interest only?

Do I qualify?

There are many qualification criteria such as limits on first-time buyers or buy-to-let experience. It may be personal income or difficulties around self-employed income proof. Others may have issues with credit scores or a variety of other personal criteria.

... read more on Do I qualify?

What rental income is needed?

New regulations limit borrowing based on the rent deemed achievable by the lender's valuer. The minimum is assessed at a rate of 5.5% ensuring a 125% coverage.

As such for a £100,000 mortgage you would need at least £572 rent. Put simply you need £5.72 rent at a minimum for every £1,000 borrowing. That demonstrates the minimum - mortgage lender criteria may be tougher.

... read more on What rental income is needed?

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