A buy to let remortgage replaces the existing mortgage on a property you rent out with a new one. Unlike a residential mortgage, which is secured on the home you live in, a buy to let mortgage is secured on an investment property, and lenders assess it differently.
You might remortgage to secure a better interest rate, to borrow more against your property value, or to change how the mortgage is structured, for example moving from a capital and interest mortgage to an interest only basis. Whatever your reason, the goal is the same: making sure your rental property is on the most suitable deal for your mortgage needs.
Our buy to let remortgage advice is always fee-free. In some circumstances, such as adverse credit cases or mortgages under £100,000, a small arrangement fee may apply. Get in touch to discuss your specific situation.
The process is similar to your original mortgage application, but usually quicker, and a straightforward buy to let remortgage typically completes within four to eight weeks. Here is what to expect.
Your adviser reviews your existing mortgage, your property value and your rental income, then recommends the most suitable deal from across the whole of the market.
We handle the mortgage application for you. The new lender values the property and runs its checks against its lending criteria.
A conveyancer handles the legal transfer. Many buy to let remortgage deals include a free valuation and free legal work.
The new lender repays your current mortgage and your new deal begins, with your rental income now working against a better rate.
How much equity you can release depends on your property value, your existing mortgage balance and the rental income the property generates. If house prices have risen since you bought, or you have paid down some of the capital debt, you may have built up significant equity.
Landlords often release equity to fund a deposit on their next rental property or to improve their current one, for example making it more energy efficient. Bear in mind that releasing equity increases your loan and your monthly repayments, and if property values fall you could be left in negative equity. Your property may be repossessed if you do not keep up repayments on your mortgage.
Loan to value (LTV) is the size of your mortgage as a percentage of your property value. Most buy to let lenders will offer a maximum loan of 75% LTV, with the sharpest rates usually reserved for landlords borrowing at 60% LTV or below. So if your rental property is worth £300,000, the maximum loan available would typically be £225,000. The lower your LTV, the more lenders you can access and the better the deal you are likely to be offered. You can check your own figure with our loan to value calculator.
Buy to let lending is assessed mainly on the property's profitability rather than your salary. Most lenders want the rental income to cover 125% to 145% of the monthly mortgage interest, calculated at a stressed rate that is higher than the rate you will actually pay. Some lenders also apply a minimum salary requirement, typically £20,000 or £25,000, while others have none at all. Because every lender's criteria differ, the maximum loan available can vary considerably from one lender to the next, which is where whole-of-market advice earns its keep.
Get a rough idea of the maximum loan available and how much equity you could release. Enter your property value, your existing mortgage balance and your monthly rental income.
For illustration only, based on a 75% maximum loan to value and rental income covering 145% of the mortgage interest at a stressed rate of 5.5%. Actual borrowing depends on the lender's criteria and your circumstances. This is not financial advice.
Choosing between a fixed or variable rate depends on how much certainty you want over your mortgage payments, and how flexible you need to be.
A fixed rate mortgage means your interest rate is locked in for a set period, usually two or five years. Your monthly payments stay the same regardless of what happens to interest rates, which makes budgeting for letting agency fees, maintenance costs and landlord insurance much easier.
A variable rate mortgage moves with interest rates, most commonly tracking the Bank of England base rate. Payments can fall as well as rise, and tracker deals often carry lower early repayment charges, which suits landlords who may want to sell or restructure before a fixed term would end.
Most landlords choose an interest only mortgage. Your monthly payments cover the mortgage interest and not the capital, which keeps costs down and monthly rental profit up. The loan itself is repaid at the end of the mortgage term, usually by selling the property or remortgaging again.
A capital and interest mortgage costs more each month but steadily reduces what you owe. There are tax implications either way, including how mortgage interest relief affects your income tax, so it is sensible to seek professional advice before deciding.
A growing number of landlords hold rental property through limited companies, and many remortgage specifically to make that move. Transferring a personally owned buy to let property into a company is treated as a sale and purchase rather than a simple remortgage, and there are tax implications, including possible stamp duty and capital gains tax, so specialist tax advice is essential.
Limited company buy to let mortgage rates are typically a little higher, but fewer lenders' criteria now exclude company borrowers, and we can compare deals across the specialist lenders operating in this market. If you own four or more properties, our portfolio landlord guidance covers how lenders will assess you.
Sometimes a deal with a higher rate and no arrangement fee works out cheaper overall, and sometimes the opposite is true. We always compare deals on the total cost over the deal period, not just the headline rate. Read more in our guide to remortgage costs explained.
Switching to a new deal with your current lender, known as a product transfer, usually involves less paperwork and no legal work. It can be the right answer, particularly if your circumstances have changed and a full mortgage application would be difficult.
The trade-off is choice. Your existing lender can only offer its own products, so you will never know whether a better deal existed elsewhere unless you compare the wider market. We check both options and recommend whichever genuinely leaves you better off.
Your credit history matters, but adverse credit does not necessarily rule you out; it simply narrows the lenders whose eligibility criteria you meet. To apply for a buy to let remortgage you will typically need:
The best buy to let remortgage is not simply the lowest rate. The right deal balances the interest rate, fees, flexibility and how much you can borrow against your rental income. A deal that suits a first time buyer landlord with one property will rarely suit a portfolio landlord with ten.
As a fee-free, whole-of-market broker authorised by the Financial Conduct Authority, we search over 1,000 products to find the deal that fits your circumstances, then manage everything through to completion.
Call 03300 432 428From fixed rate products to portfolio landlord rules, explore each topic in detail so you can invest with confidence.
Fixed rate BTL mortgages lock in your interest rate for a set period, keeping monthly costs predictable. Tracker mortgages follow the Bank of England base rate and often carry lower early repayment charges, ideal if you want more flexibility.
Own four or more mortgaged buy to let properties? You are a portfolio landlord. Lenders must assess your entire portfolio, including total borrowing, rental income and void periods, at each new application. We help you navigate the criteria.
Want to keep your current home and move on? A let to buy mortgage converts your existing property into a buy to let, releasing equity to fund your new purchase. We arrange both mortgages together as part of the same process.
It is possible to purchase a buy to let property as your first ever property. Lender criteria differs from a standard residential application. We explain what is involved and which lenders will consider first-time landlords.
Standard home insurance does not cover missed rental payments, tenant damage or landlord liability. Specialist buy to let insurance, or portfolio cover for multiple properties, protects your investment properly.
Under the Rent Act 1977, some tenants have the right to remain in a property even if it is sold. Sitting-tenant properties are often priced lower, but many mainstream lenders will not finance them. We know which specialist lenders will.
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