Buy to Let Remortgage

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Hello and welcome to today’s episode of the Mortgage Mum podcast. We are sticking with our remortgage series, and today we’re talking about Buy to Let remortgages.

This is a bitesize episode, hopefully giving you everything you need, with the lovely Tessa asking your questions.

Can you remortgage on a Buy to Let? Why remortgage your Buy to Let?

Yes, you can remortgage a Buy to Let property, although I will say lots of people have struggled in the last few years. We’ll talk a bit more about that in a moment.

In terms of why you would do that? Well, some people do it to release equity, and others do it to get the most competitive interest rate, which can involve moving to another lender.

The process is very similar to a normal remortgage, but it’s assessed on your rental income rather than your personal income alone.

You might want to change the terms of your mortgage. Lots of people change from repayment to interest only, or vice versa. Most people remortgage so they don’t sit on the variable rate – which is often much higher than the interest rates that you’ll be offered on a fixed or a tracker rate.

How do I remortgage a Buy to Let? What’s the process?

The first thing to do is check when your early repayment charge runs out. Unless there’s a very good reason, I wouldn’t recommend remortgaging your Buy to Let before that time, because of that charge to exit your current deal.

To remortgage, you would ideally speak to an advisor. You can, of course, speak to your current lender and see what rates they have to offer at the end of your current deal. But I would always recommend speaking to an advisor.

We can check the whole market for you and make sure you’re getting the most competitive rate. With Buy to Let this is often a business decision, where you want to make as much profit on your rent as you can.

What you pay on your mortgage obviously takes away from that rental income every month. It’s really important that you know what that income is before you speak to your advisor. We look at mortgage deals for you and take care of the whole application process, once we’ve got some documents from you such as proof of rental income, proof of ID and bank statements.

There’ll be a valuation of your property, which we can sometimes help with, and finally we look to get you a mortgage offer and get that switched – via a free solicitor, usually. Then you’ll move on to your new product or your new rate.

Can I be refused Buy to Let remortgage? Why might this be?

You can, unfortunately. A lot of people have been refused a Buy to Let remortgage because the rental income is not sufficient to cover the mortgage affordability with the lender.

We particularly found this post-Liz Truss, because the interest rates were so much higher against the rent landlords had been charging. Most lenders like your rent to be at least 125% of your mortgage payment.

Mortgage rates going up so much meant those payments were so much higher – and the rent wasn’t covering that calculation. Lenders couldn’t let people remortgage because it was no longer affordable. A lot of people were struggling and sitting on the variable rate. They were not able to up the rent by as much as they needed to, to make it affordable.

Even if they did increase the rent, that obviously affects another household in a very negative way. So it’s been a really testing time for people with Buy to Lets where the rental income wasn’t matching the mortgage payment.

It really depends how much deposit they’ve got in the property, as well. It’s also worth mentioning that big changes to your credit score could reduce your options. Perhaps the property has dropped in value. Loan to Value is really important in the Buy to Let market and if that’s squeezed, you may have to put money in to actually make it meet the requirement for a Buy to Let mortgage.

So there are quite a few reasons, and it’s more complicated. With a normal remortgage, it’s more about your income. Can you afford it? But with a Buy to Let, other factors are at play and they can be out of your control.

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How long does it take to remortgage a Buy to Let? So does this depend?

It varies. A typical remortgage can take four to 12 weeks, but we do recommend speaking to somebody six months before your current deal comes to an end. People often think it’s really premature to do it then and worry that interest rates might go down further. They wait for the perfect time to strike.

But what they don’t realise is that a lot of advisors will check the rates for you regularly until that remortgage goes through. So save yourself the time and get it organised six months before. If interest rates start to go up again, you’ve actually got something agreed and approved.

What costs are involved with remortgaging a Buy to Let? And do you have to pay stamp duty?

Right now, as we record this episode in March 2025, we’re approaching stamp duty changes, so we’re talking about this all the time.

But there’s no stamp duty when remortgaging a Buy to Let, unless you want to transfer ownership. If you’re adding or removing a partner, you don’t necessarily get the same allowances as you do post-breakup or divorce on a residential property. So it’s worth checking that.

Otherwise, there’s no stamp duty to remortgage your Buy to Let property. There are the typical remortgage fees and your advisor might charge you a fee. You may be charged a valuation fee, but often that comes for free. You may have some legal fees, but again those are mainly free with remortgages.

I’ve said it already, but check your early repayment charges. Make sure that you’re not leaving your fixed term early – and if you are, find out what those costs are. They can be quite hefty.

What are the benefits of remortgaging a Buy to Let property, or remortgaging in general?

Remortgaging in general is really good money management. It’s not always all about the rate. It’s about the best mortgage for you in your current situation, with the current equity you have and the current valuation of the property.

It’s like an MOT, a really good check in. If you’ve got more than one Buy to Let, it’s a good time to just work out where you are with your property portfolio via an overview with an advisor. The real benefit is making sure you are being as commercial as you can and getting the best interest rates.

Some people take this time and decide they are ready to buy another property. How much equity is there across your properties and can a remortgage help you buy another for the portfolio?

It’s a really good opportunity to reflect, look at the situation you’re in right now, your goals and your options. Perhaps you’re in a sticky situation and it’s an opportunity to look at whether to keep this property. Are you making enough from it, or should you sell it?

What else do we need to know about remortgaging a Buy to Let?

If you’re a landlord, it’s really important to be aware of the changes coming with the Renters Reform in April 2025. It’s very impactful and we’re seeing some landlords exit the market as a result.

People think that their rental properties are being released into the market – but actually other landlords are picking them up. It’s those that perhaps have more confidence in the market or bigger portfolios. There aren’t actually fewer rental properties, just larger landlords buying the same homes.

That’s just something to consider if you have a Buy to Let. Seeking advice is critical at times like this when there are so many changes coming. It’s never been more important for Buy to Let clients to get advice – and feel they’ve got a trusted team around them to help them navigate it.

That team extends to your accountants, particularly with the tax implications on Buy to Let. We’ve got extra stamp duty now for people with second properties, and there are Capital Gains Tax changes.

It’s really important to get advice to make sure your investment is still working for you and you’re doing your utmost to make it as profitable as possible.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST Buy to Let MORTGAGES.