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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 15th October 2020*

Remortgaging a buy to let can be straightforward for most customers, but for others it can be more difficult, especially if things have changed drastically since the first mortgage was arranged.

For the best buy to let remortgage deals search through our best buy tables below. For further information and advice read on…

Why remortgage your buy-to-let?

You can remortgage your buy-to-let to release equity if you need to raise some cash, it’s also a good way to get a better rate or change the terms of your mortgage deal. Whatever the reason you want to remortgage your property, it can make a huge difference to your monthly repayments and, therefore, the return on your investment.

If you have finished your fixed or tracker initial rate period, you may find yourself on your lenders standard variable rate (SVR), which can usually be anywhere from 4% up to 6%.

Example: If you have a £100k interest only mortgage on a SVR of 5.25% your monthly payments are likely to be around £438pm. At 75% Loan to value (LTV) it may be possible to get buy to let remortgage deals at say 3.9%, thus lowering your interest by 1.35%, which is £325pm, reducing your monthly payments by £113pm, that’s £1356 a year!!!

Getting the best buy to let remortgage deals

Buy to let remortgage rates tend to be higher than those for main residential mortgages, and lenders would say that this is because of the increased risk of the loan defaulting should the tenants not pay their rent and the borrower not be able to keep up with payments. Having said that, there are still some great rates available which is why many landlords are remortgaging at the moment.

Remember though, it doesn’t just come down to rate.

The best buy to let remortgage deals are those that have the best overall cost. This includes the rate and associated mortgage fees. For most people, there’s little point in having an amazing rate if it costs tens of thousands to set up. There’s a balance to it, and it ultimately depends on the size of the mortgage you are taking.

 For instance,

Product A = 2yr fixed rate at 3% with £1000 in fees,
Product B = 2yr fixed rate at 3.5% with £99 in fees,

Which is the best deal to take out?

For a mortgage of £105,000… 105k + 1kfee @3% = 265pm Approx. total cost = £7,360 105k + 99 fee @ 3.5% = 307pm Approx. total cost = £7,467 Savings made by taking the lower rate with higher fee = £107

If the mortgage was under 105k then it will most likely be best to take the mortgage with a lower fee. Conversely, as the loan amount increases higher, the savings made with the lower rate and higher fee increase dramatically.

For a mortgage of £200,000… 200k + 1kfee @ 3% = 503pm, Approx total cost = £13,072 200k + 99fee @ 3.5% = 584pm, Approx total cost = £14,115 Savings made by taking the lower rate with higher fee = £1,043

Can you remortgage to buy to let?

Yes! It is possible to switch from a residential mortgage to a buy to let agreement, as long as you meet the lender’s eligibility and affordability criteria for buy to let mortgages.

If you looking to change your mortgage type so you can rent out your property, check out our article on switching to buy to let or make an enquiry to speak with an expert.

Can I remortgage my house for a buy to let purchase?

Yes. The experts we work with have helped many customers remortgage to release equity so they can use the equity to purchase a buy to let property.

Some property owners also choose to take out a product known as a let to buy mortgage, which lets you convert your existing home into a buy to let and take out a new residential mortgage on another property.

Make an enquiry to discuss both of these options with an expert.

Can I remortgage my buy to let if I’ve had bad credit?

Yes there are a growing number of mortgage lenders now offering bad credit for buy to lets, the type of credit issue you have may restrict you but there are potential options available to you. 

If you’re looking to remortgage your current property to a buy to let mortgage there are also potential options available to you even with bad credit, for more information on a bad credit remortgage have a read through of our in-depth guide. 

Speak to an expert about buy to let remortgages

For buy to let mortgage advice get in touch now and an expert will talk through with you what you need to know, or take care of everything for you if that’s what you’d prefer!

If you’re ready to proceed, make an enquiry and an expert will be in touch ASAP. If you require help immediate assistance please call 0808 189 2301.

Updated: 15th October 2020
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.