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Buy to Let Remortgage

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    If you’re a landlord and looking to release equity or reduce the monthly repayments on your buy-to-let mortgage, a question you have already asked yourself is can I remortgage my buy-to-let? So, here’s the good news: You can remortgage your buy-to-let property!

    At YesCanDo, our specialist buy-to-let mortgage advisers are here to help you. Keep reading to learn more and then get in touch with us for buy-to-let mortgage advice when you’re ready to consider a remortgage for your rental investment.

    Getting the best buy to let remortgage

    Buy-to-let mortgages are similar to residential mortgages in most ways. The main difference is the vast majority of buy-to-let mortgages are set up as interest-only mortgages and residential mortgages tend to be set up as repayment mortgages.

    When it comes to interest rates you will find that mortgage deals are very similar on a buy to let mortgage vs residential mortgage.

    Interest rates and products vary considerably between mortgage lenders. Some lenders specialise in buy to let mortgages so you should do what you can to improve your chances of a better buy-to-let mortgage. The next steps are advised.

    Get your financial house in order

    If you’re looking to remortgage your rental investment, the first thing you need to do is consider your financial situation. There are a few things mortgage lenders will take into account when deciding how much to lend you, and these include:

    • Your credit history
    • Your rental income
    • Your current equity
    • The size of the remortgage you want

    Before approaching a lender, you should do what you can to improve your credit score and your level of income. You should also save money for a bigger mortgage deposit. By taking these steps, mortgage lenders are more likely to offer you a better rate of interest to reduce your mortgage payment plan.

    Get your lowest buy-to-let rate today

    Search for a new mortgage deal

    After improving your financial situation, you can then consider the buy-to-let mortgage deals that are out there. However, timing is everything.

    If you remortgage too early, you could be liable for early repayment charges (ERCs) from your current lender.

    If you remortgage too late, you will end up on your lender’s standard variable rate (SVR). This interest rate will usually be higher than that on an existing fixed or tracker rate mortgage, so it’s best to remortgage before the end of your fixed or tracker initial rate period.

    The right time to consider remortgaging is usually about 4-6 months before your current buy to let mortgage deal ends. This will give you enough time to research buy-to-let mortgages and complete the application process before your old deal ends and your new remortgage deal begins.

    Talk to a mortgage broker on how to release equity

    When considering remortgage deals, it’s wise to speak to one of our advisers that specialise in buy-to-let mortgages. At YesCanDo Money, we can give you all the advice you need on buy-to-let remortgages and can help you gain access to a deal that will help you save money in the long run.

    If you would like to talk about the remortgaging process for a buy-to-let further, feel free to contact our team of expert mortgage advisors or chat with us on WhatsApp.

    Get your lowest buy-to-let rate today

    Search for a new mortgage deal

    After improving your financial situation, you can then consider the buy-to-let mortgage deals that are out there. However, timing is everything.

    If you remortgage too early, you could be liable for early repayment charges (ERCs) from your current lender.

    If you remortgage too late, you will end up on your lender’s standard variable rate (SVR). This interest rate will usually be higher than that on an existing fixed or tracker rate mortgage, so it’s best to remortgage before the end of your fixed or tracker initial rate period.

    The right time to consider remortgaging is usually about 4-6 months before your current buy to let mortgage deal ends. This will give you enough time to research buy-to-let mortgages and complete the application process before your old deal ends and your new remortgage deal begins.

    Talk to a mortgage broker on how to release equity

    When considering remortgage deals, it’s wise to speak to one of our advisers that specialise in buy-to-let mortgages. At YesCanDo Money, we can give you all the advice you need on buy-to-let remortgages and can help you gain access to a deal that will help you save money in the long run.

    If you would like to talk about the remortgaging process for a buy-to-let further, feel free to contact our team of expert mortgage advisors or chat with us on WhatsApp.

    Get your lowest buy-to-let rate today

    Things to take into consideration when remortgaging a buy-to-let property

    Before you take out a buy-to-let remortgage, consider the following first.

    Equity

    The more equity you have in your property, the better, as you will be able to use some of it as a deposit for your next mortgage. Your mortgage lender will instruct a valuer to determine the value of your property as this will let them know the amount of equity you have to play with.

    Projected income

    Most mortgage lenders will require an annual projected rental income to be at least 125% of your annual mortgage repayments. It’s advisable to do what you can to improve your rental income, such as making improvements to your property so you can raise the rental charge.

    Property type

    If your property is deemed as non-standard, you may be ruled out of the best buy-to-let remortgage deals on the market. Non-standard properties include flats, high-rise buildings, and any type of house that doesn’t have a standard brick or slate-type roof.

    Number of properties

    Mortgage lenders will want to know about all your properties. This will include residential mortgages as well as buy-to-let mortgages. The information needed on each property include.

    • Property value
    • Property address
    • Mortgage lender
    • Outstanding mortgage
    • Rental income
    • Is each mortgage a repayment mortgage or interest-only mortgages

    Our advice is to set up a simple spreadsheet with all this information and this can be kept updated by you and also can be emailed to your mortgage broker when you need to remortgage any of your buy-to-let mortgages or residential mortgages.

    Credit score

    It’s not impossible to get a new buy-to-let mortgage with bad credit although you won’t be able to access the best deals on the market due to the perceived risk you pose to mortgage lenders. It’s advisable to improve your credit score before making your application.

    Personal income

    When assessing your affordability on a buy to let mortgage, lenders will take your personal income into account when deciding how much to lend you. Although the rental income is a major factor on a buy to let mortgage it is our experience that most applicants do not realise that mortgage lenders set a minimum income requirement of £25,000 per annum for those looking to acquire a buy-to-let mortgage, although there are those who may accept less.

    Tenants

    Your tenants will not be on a short-term tenancy agreement. Some lenders will turn down your remortgage application if the people living in your property are relatives, students, and people on benefits. This is because mortgage lenders see them as a risk to your income and your ability to pay off your buy-to-let remortgage.

    Get your lowest buy-to-let rate today

    Why would you remortgage a buy-to-let property?

    This is a question the mortgage lender will ask you as the reason why you’re looking to remortgage could have an effect on the deals you will be eligible for. If you were looking to remortgage your buy-to-let to release equity, for example, your application might be treated differently than if you were to remortgage to reduce your monthly mortgage payments.

    Reasons to remortgage include:

    Increase your property portfolio

    If you raise extra on your buy-to-let mortgage as you want to buy another rental property, you could use the equity from one house to pay for the deposit on another. This is a common practice for landlords although it’s worth noting that some lenders will limit the maximum number of rental properties you own to offset the risks involved in owning a large number of properties. – Portfolio Mortgages for Landlords

    Releasing equity for buy to let

    If you have equity in your buy to let property, you may want to release some equity. The capital raised can then be used to achieve such things as:

    Releasing equity for home improvements

    It is common for landlords to release equity to reinvest in their let properties Landlords often use the released capital to make home improvements to their property to increase its value. This reinvestment can increase monthly rental income and yield as well as the value of the property. Lenders are likely to let you release equity for this purpose as it offsets any risks to them.

    Releasing equity for debt consolidation

    If you consolidate your debts with a remortgage, you may benefit from a lower interest rate so you will be able to improve your financial situation sooner. However, some lenders will limit the loan to the value of the mortgage they offer, so you may not get access to the best deals.

    Reduce your monthly repayments

    It’s common for people with a residential mortgage to remortgage as they can benefit from lower interest charges. If you were to do the same on your buy-to-let properties, you would reduce each monthly payment on your loan and make more of a profit.

    You can reduce your monthly payments with a repayment mortgage and an interest-only mortgage, but speak to one of our team to find out which mortgage type is right for you.

    Change to a residential mortgage

    If you ever decide to live in your let property, you will need to remortgage to convert your buy-to-let mortgage into a residential mortgage, be that through your current lender or another mortgage provider. Get in touch with us for mortgage advice related to this situation.

    Buy-to-let remortgage rates

    Rates vary between mortgage lenders as they each have their own eligibility criteria. Lenders will consider such things as:

    • Your income – Customers with a higher annual income often have access to better rates as they are seen as less of a risk factor by the lender.
    • Credit score – Customers with good credit scores are likely to get a better rate than those with a poor credit score. – Free credit report with Checkmyfile UK
    • The size of your deposit – The higher the deposit, the lower the interest rate.

    When looking at buy-to-let mortgages, there are other factors that can affect the rates you will be offered, such as how much equity you have in your property, the length of your proposed loan term, and the Bank of England base rate.

    However, it’s worth keeping in mind that the lowest rate doesn’t always equate to the best deal. It’s important to consider the overall cost of the buy-to-let mortgage, including setup costs for the mortgage and early repayment charges.

    To ensure you don’t fall into any hidden traps, it’s always worth speaking to a member of our team for impartial advice and support to make sure both your residential mortgage and your buy to let mortgages are working for you.

    Get your lowest buy-to-let rate today

    Expert fee-free buy-to-let mortgage advisors

    For free buy-to-let mortgage advice, speak to YesCanDo. An experienced buy to let mortgage adviser will take time to understand your individual buy-to-let situation. We will search the whole mortgage market to find you the best buy-to-let rates and deals for your rental property goals.

    Remortgage your buy-to-let property with help from YesCanDo Money

    For up-to-date information on buy-to-let mortgage rates and advice on what to do when remortgaging a buy-to-let mortgage speak to one of our mortgage brokers today.

    We are an experienced buy-to-let mortgage broker, with access to the whole mortgage market, we can compare mortgage rates on your behalf, to make sure you get the very best mortgage deal including those from specialist mortgage lenders that may be better suited to your particular situation.

    We will discuss with you the different types of mortgage products available so you gain access to the right mortgage for your needs. YesCanDo will do everything that is needed for your buy-to-let remortgage in a timely manner to ensure you don’t incur any charges or extra interest. This will include full support with your mortgage application and regular communication with your mortgage lender and solicitor.

    If you need help with your residential mortgage we can help you with this as well.

    For more mortgage advice, get in touch with our team today and follow the links below for some useful information.

    Contact our FEE-FREE Mortgage Advisers

    Put the odds of mortgage approval in your favour with the help of a qualified and experienced mortgage broker.
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    Steve Roberts
    Steve Roberts

    Stephen Roberts MAQ is the founder of YesCanDo Money, one of the UK's largest no-fee mortgage brokers. With over 30 years of mortgage experience, he has advised and helped thousands of first-time buyers buy their first home and home movers buy their dream home. Speak to a mortgage expert today by completing our contact form:

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