Making Sure You get the Best Buy to Let Mortgage or Remortgage Deal
Expert Advice for Landlords and Investors
Life for Buy to Let Landlords has become increasingly
difficult over the past few years. However, at Bristol Mortgages Online and
Bath Mortgages Online, we have found that more and more existing and potential
landlords are realising the huge benefits of dealing with experienced, knowledgeable
fully independent brokers like ourselves. Landlords who own four or more
mortgaged buy-to-let properties can expect lenders to look across their whole
portfolio if they want to apply for a mortgage on a new property.
Under Prudential Regulation Authority (PRA) rules, from the end of September 2017 lenders will have to take into account all the buy-to-let properties an investment property owner has a mortgage on when deciding whether to lend. This is so they can be certain landlords will be able to afford any new addition borrowing, both now and if interest rates rise in the future.
What impact will this have?
So far, all lenders have confirmed exactly how they are implementing the new rules. Some, however, have indicated that they may no longer offer mortgages to those with larger property portfolios, which could mean mortgage choice becomes more restricted. Those who do continue to lend to portfolio landlords are likely to want to see more information about the portfolio as a whole, including details of rental income, as well as landlords’ overall costs and personal income and tax liabilities, to ensure that landlords aren’t over-exposed.
This means that portfolio landlords may have to produce larger quantities of paperwork to support their mortgage applications, so it’s important to ensure all records are up to date
If you are a portfolio landlord and are planning to remortgage or add to your existing properties, you may want to consider acting sooner rather than later. If you haven’t reviewed your buy-to-let mortgages for a while, it’s therefore worth checking the rates you are on now to see if you might be able to remortgage to a better deal.
Remember other PRA changes
If you are intending to review your portfolio in the next few months, it’s important to take note of other PRA changes which have already come into effect. For example, lenders must apply a ‘stress test’ of a minimum interest rate of 5.5% for the first five years of the loan. However, some lenders apply lower stress tests on five-year fixed rate buy-to-let deals. Because the rate is fixed over this period it won’t be affected by rising interest rates and so avoids the need for a higher stress test. Lenders similarly may adopt a more flexible approach if landlords are remortgaging on a like-for-like basis.
Some lenders may also adopt a less restrictive approach for landlords who are basic rate taxpayers, as tax relief changes introduced in April which restrict the amount of tax relief they can claim only affect higher or additional rate taxpayers.
What we offer
The Directors and Senior Mortgage Advisers at both Bristol Mortgages Online and Bath Mortgages Online, have expert knowledge of a host of specific Buy to Let products for investment mortgages and remortgaging purposes. Many of these lenders are specialists in this sector and will only deal with clients via specialist, independent mortgage brokers like us.
For expert advice and more information or to book your FREE consultation please visit one of our websites, call or email
Bristol Mortgages Online www.bristolmortgagesonline.com Tel 0117 325 1511
Bath Mortgages Online www.bathmortgagesonline.com Tel 01225 584 888
Exeter Mortgages Online www.exetermortgagesonline.com Tel 01392 690 888
