Remortgaging buy-to-let: what are the options?
- 11th December 2013
- Landlord Property News
End of Funding for Lending scheme means now might be the best time to shop around for a new mortgage.
Landlords who have buy-to-let mortgages which come to an end shortly have a range of options to choose from when their current deal ends.
The most obvious option for landlords is to look at new products offered by their existing lender to see how they compare with their current deal. If they find that what their current lender can offer is inferior to what other lenders in the market can offer then they are best to shop around.
Landlords who are in the market for a new buy-to-let mortgage should start looking now.
This is because in November, the Bank of England announced that the Funding for Lending scheme would be “re-focussed” to remove support for loans to homebuyers from February 2014. The average buy-to-let mortgage rate has fallen since the launch of the Funding for Lending scheme in 2012 but its withdrawal from the housing market means that attractive rates may not be around for much longer.
Here are some examples of the most competitive buy-to-let remortgage deals on the market:
- NatWest – Two year tracker with an introductory rate of 2.69% until 31 March 2016, reverting to 4.5% at 60% Loan to Value (LTV) with a £1,995 arrangement fee.
- RBS – Two year tracker with an introductory rate of 2.69% until 31 March 2016, reverting to 4% at 60% LTV with a £1,995 arrangement fee.
- NatWest – Two year fixed with an introductory rate of 2.79% until 31 March 2016, reverting to 4.5% at 60% LTV with a £1,995 arrangement fee.
- RBS – Two year fixed with an introductory rate of 2.79% until 31 March 2016, reverting to 4% at 60% LTV with a £1,995 arrangement fee.
- Virgin Money – Two year fixed with an introductory rate of 2.89% until 1 April 2016, reverting to 4.99% at 60% LTV with a £2,250 arrangement fee.
Another option that landlords have is to consider realising gains by selling one or more of their properties to capitalise on the recent surge in house prices. Many landlords are now selling properties in order to release some equity, which they then use to remortgage the remaining properties in their portfolio to take advantage of the more attractive rates that are now available at lower loan to value levels.
Stephen Ludlow, Chairman at ludlowthompson, says: “Landlords who are looking to remortgage should take the opportunity now to lock in a deal at an attractive rate for the next few years - a time when rates are expected to go up.
“Landlords might also benefit from selling their property, making the most of the increasing house prices across the UK.”
Landlords who are looking to remortgage should take the opportunity now to lock in a deal at an attractive rate for the next few years.
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