If you are wondering whether you can get a new mortgage on a buy to let (BTL) property, the answer is yes. This might even occur within six months of buying. Here we advise as to how your individual circumstances may affect the process.
Your intentions affect the deal
Lenders tend to treat you differently depending on your reasons for refinancing your BTL property. You may be seeking to release equity, perhaps for home improvements, or you may want to buy another property. Alternatively you may simply want to obtain a better rate. These different scenarios mean that different rates will be available to you.
Restrictions on releasing equityIf you want to grow your property portfolio, buy to let remortgages enable you to free up equity for a part payment or deposit. Landlords are, however, restricted by certain regulations, including those connected with affordability if the landlord pays tax at the higher rate; those connected with portfolio landlords (generally those who own more than four BTL properties); and those where lenders limit the number of buy to lets a borrower can own (generally four to ten). These restrictions reduce the risk that comes with owning a larger portfolio of property.
Remortgaging your existing home to buy a BTL as a way of releasing equity is common. Talk to us for specialist advice whether you seek a full remortgage, a portfolio mortgage or a second charge. We will discuss the various factors and help you to make the right choice.
Property value / loan to value
The LTV ratio can alter considerably as lenders make different calculations. Also the amount you want to borrow and the amount of equity that is in the property is important.
For example, if your property is worth £250,000 with equity of £200,000 and you wish to borrow £100,000 across 25 years, your LTV is 40 per cent. But if you hoped to borrow £160,000 your LTV would be 65 per cent.
Some lenders will grant remortgages to a high LTV percentage. As we work across the whole market, we can contact the right lenders to fit your personal circumstances.