Buy to Let Remortgage
- A team of down to earth mortgage advisers
- Working for you to find the right lender from a huge panel
- Designed to save you time (and a few headaches!)
Get in touch for an initial fee free, no-obligation chat with an adviser about the most suitable mortgage option for you.
The Financial Conduct Authority does not regulate some Buy to Let Mortgages.
Your property may be repossessed if you do not keep up with your mortgage repayments.
Buy to Let Remortgage
Anthony McQuilliam talks us through the process of remortgaging a Buy to Let property.
Approved by The Openwork Partnership on 15/03/2024.
Can you remortgage on a Buy to Let? Why would you do this?
Yes – it’s the same as a standard residential mortgage. When you first took your mortgage out, you would have opted for a particular term for your product – two, three, five or even 10 years.
Once you have finished that particular term, if you don’t remortgage you will go onto the standard variable rate – which usually will send your payments through the roof. That’s the main reason to remortgage when your Buy to Let deal finishes.
It can also give you an opportunity, if you’re looking at growing a property portfolio. You may have earned some equity if house prices have increased. As long as the rental income and the affordability stack up, some lenders will allow you to release further funds for home improvements – or to aggressively grow your portfolio and buy additional properties.
How do I remortgage a Buy to Let? What’s the process?
The best advice is to start looking into that six months prior to your current mortgage expiring. If you leave it until a few weeks before, your new deal may not complete in time. You could go on the variable rate and so your payments will increase.
Starting early gives you time to look for good lenders. If you want to maximise the amount you can take out of the property, it’s a case of doing it nice and early.
Speak to your broker six months prior to everything going through. You need to have your documents ready, such as bank statements and proof of income. You need to have your tax calculations and tax year overviews to show you declare that rental income to HMRC.
Once you have a mortgage offer, a surveyor will go around to the property to make sure that the rental income stacks up and the value of the property is as you’ve stated on the application.
As long as they’re happy with that, the mortgage offer is issued and on the day your current mortgage expires, the new mortgage starts. If you’ve requested any further funds, they will be transferred to the solicitor and through to yourself.
Speak to an expert
Our highly experienced Advisers are ready to help you with either buying or remortgaging a home, protecting your property and lifestyle along with saving you time and effort, ensuring you have a competitive deal right for you.
Can I be refused a Buy to Let remortgage?
Yes, of course, just as with a standard residential mortgage there are still criteria you need to abide by. If you don’t match up with that lender’s requirements you can be declined.
Probably the biggest reason is bad credit. If you’ve missed payments on your mortgage or on any of your commitments, it can damage your credit score. However, certain lenders specialise in mortgages for people in this situation. You may pay more, which could reduce the profit you make on a month-to-month basis.
Another common reason for Buy to Lets being declined is not declaring the rental income. If you’ve got no proof from your tax calculations and tax year overviews, some lenders can kick the mortgage application back.
Most lenders require a certain amount of income for your mortgage application to go through. Some Buy to Let lenders have higher minimum income requirements of £25,000 to £30,000. If you’re below that, those particular lenders may decline the mortgage.
How long does it take to remortgage a Buy to Let?
If you start the process with a good broker on board, the average time between submitting the application and the mortgage offer being issued is usually around two to three weeks – depending on how quickly the valuation is done.
On the legal side of things, it’s probably six to eight weeks for a remortgage to go through. But it’s always worth looking into it long in advance. If you start five to six months before your remortgage is due, you won’t be stressing that your payments are going to jump up.
What costs are involved with remortgaging your Buy to Let property? Do you have to pay stamp duty?
You only pay stamp duty when you purchase a property. Because you already own it and you’re just refinancing, you won’t have to pay any stamp duty at all.
Other costs to budget for are dependent on the lender. There will be a valuation fee and potentially product fees – these are substantially higher for Buy to Let, and particularly if you run properties through a limited company. You can pay these fees upfront, or you can add them to the mortgage – but you are charged interest, so in the long run that may cost you more.
There’s also a mortgage broker fee, charged once the mortgage has been all agreed and ready to go. At that point you just need to make sure you’ve got the money to cover the monthly payments.
What are the benefits of remortgaging a Buy to Let property?
The first one is for aspiring landlords who want to grow a portfolio. It takes a long time to save up money for another deposit, but if you have an equity in the property you can remortgage money out of that to buy more property and grow your portfolio.
That will increase your cashflow on a month-to-month basis, so that’s a big benefit. Another benefit is to avoid your monthly payments jumping up substantially at the end of your deal. You have flexibility to reassess your mortgage and see what other deals are available.
How can a mortgage broker help if somebody is looking to remortgage their Buy to Let?
Once they’ve got a Buy to Let mortgage, some people just go back to their existing lender for a new deal. But just because that lender was the best for you five years ago, it may not be now.
We have access to more lenders than just the one you speak to directly – so we can give you many more options. We can help you achieve your plans much more easily.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.
SOME BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.
Approved by The Openwork Partnership on 15/03/2024.
Your home may be repossessed if you do not keep up with your mortgage repayments.
