Buy-to-let remortgaging: Compare the best rates
Buy-to-let remortgaging is often a smart idea that can save you a lot of money, but it's important to do the maths first.
The remortgaging process is the same as for a residential property. You’ll have to search for the best deal, pay remortgaging fees and go through affordability checks.
Provided your financial circumstances haven’t shifted too dramatically, it should be simple enough to be approved for a remortgage.
Should you remortgage on a buy-to-let property?
Many landlords will remortgage their buy-to-let property several times before selling. Here are the most common reasons you may want to remortgage:
- Your introductory deal has expired. Most buy-to-let mortgages come with a lower introductory rate. When this rate expires, you’ll be pushed onto a higher standard-variable rate. It’s often more economical to remortgage onto another introductory rate before this happens.
- You want to borrow extra money to buy another buy-to-let property. This is a common strategy used by landlords to quickly build a large portfolio of buy-to-let properties. Lenders will often be comfortable approving a mortgage advance, provided the rental income from your new property will cover the additional mortgage repayments on your current one.
- You want a mortgage with better terms. If you’ve built up a lot of equity in your property, it is often possible to negotiate a better rate. The “minimum rental profit” on your mortgage is also a term worth noting. Some lenders will insist you make at least 125% profit on your property, while others ask for more. If you’re struggling to rent out your property while meeting your current lender’s terms, this could be a valid reason to consider remortgaging.
It doesn’t always make sense to remortgage. Here are some common scenarios in which remortgaging a buy-to-let property isn’t a good idea.
- The fees outweigh the profits. You’ll usually have to pay a valuation fee and an arrangement fee to your new lender when remortgaging. It’s possible that you’ll owe your current lender exit or early repayment fees too. If these fees eat up the profits you’ll make by remortgaging, you’re better off staying put with your current provider.
- You’re planning to sell or move into the property soon. Remortgaging fees are most likely to outweigh profits if you’re looking to sell a property in the near future. If you’re planning to move into a buy-to-let property, you’ll need to switch again to a residential mortgage. Remortgaging twice is likely to prove uneconomical.
- Your circumstances have changed. You’ll be put through the same affordability checks you went through when buying the property. If your circumstances have worsened, it’ll be more difficult to be approved for a remortgage with a better rate.
Using a mortgage broker for your buy-to-let remortgage
Mortgage brokers have specialist knowledge of the market and will be able to use this expertise to recommend the best buy-to-let mortgage for your circumstances.
This can save you the hassle of searching through every provider, while giving you the peace of mind of knowing you secured the best available deal.
It can often prove especially useful to work with a mortgage broker if your circumstances have worsened and you suspect that some lenders won’t approve your remortgage application.
Brokers tend to have an advanced knowledge of specific provider’s lending criteria, allowing them to point out the lenders most likely to approve you.
There are many mortgage brokers that specialise in buy-to-let mortgages, and it’ll often be worth your while seeking out one of these experts.
More guides on Finder
Best buy-to-let mortgage
If you’re in need of a buy-to-let mortgage, this guide looks at how you can find the best one for your circumstances.
Special-purpose vehicles (SPV): The guide
An in-depth guide to special purpose vehicles and how they can help you reduce your income tax bill if you’re buying property to let.
We looked into the latest buy-to-let statistics to see how many of these mortgages have been taken out and how many Brits are living in rental properties in the UK.
Is it illegal to rent a house without a buy-to-let mortgage?
Discover the steps you need to take to legally rent out your home.
How to switch your mortgage from buy-to-let to residential
Looking to switch your mortgage from buy-to-let to residential? We explain how.
Changing from a residential to a buy-to-let mortgage
Thinking of renting out your property? We discuss how to switch from a residential to a buy-to-let mortgage.
Consent to let explained
Unsure of the term consent to let? We explain what it means, why you might need it and whether or not it’s a good move.
Renting to a family members, children or relatives
The essential guide to letting a property to family, including what type of mortgage you need, and the rules and responsibilities that apply to landlords.
What is a consumer buy-to-let mortgage?
Discover what a consumer buy-to-let mortgage is, how they work and if you need one.
Ask an Expert