Finding the best buy to let remortgage deal possible is the easiest way to maximise the return on your rental property. Here's how to find the best deal.
With so many people finding it difficult to get on the property ladder, the demand for rented accommodation is higher than for some considerable time.
Consequently, it's likely you're going to have little trouble finding tenants and covering your mortgage payments.
However, the best way to maximise profit from your buy to let house is to get a cheap buy to let remortgage deal.
Lenders usually require a deposit of at least 20% before extending a buy to let (btl) mortgage on a newly purchased property, and similar loan to value restrictions apply to btl remortgages.
It is unusual to find a remortgage buy to let for a loan to value (ltv) of greater than 75%, and many of the best deals are available only to those that need to borrow a maximum ltv of 60% or lower.
However, higher LTV remortgaging for landlords deals are sometimes available so it's worth continually checking if you've less equity in your property.
Buy to let mortgages are usually granted based not only on the borrower’s income, but on the expected rental income from the property.
Some lenders will only grant a mortgage for which the rental income is expected to be at least 125% of the monthly repayment. It's for this reason you need to check you meet the application criteria of a buy to let remortgage deal before you apply.
Btl mortgages are possibly the only sector of the mortgage market where the majority of deals are interest only. This means that your repayments are only covering the cost of your borrowing so you will still need to find means to repay the loan itself once your mortgage deal comes to an end. Many people simply plan sell their rental property to cover this, but taking out an investment or savings plan alongside is generally advised.
Fees for buy to lets may be higher than for standard mortgages, and early repayment charges may be significantly higher so these are something else to compare and consider.
Many buy to let landlords purchase homes as an investment, this presents two significant risks. Firstly that there may be periods when no tenant can be found and hence no rental income is forthcoming, and secondly that the value of the property goes down over time rather than up.
Consequently it's a good idea to take measures to ensure that you'll be able to cover the cost of repayments throughout the remortgage term - either through landlord insurance or some other means.
Finding a cheap buy to let remortgage deal will help to this end as it will reduce the amount you're committed to covering each month.
You can use our buy to let remortgage comparison to compare your options, find the best buy to let remortgages that suit your circumstances, and apply direct. Do this and you can be confident you're getting the best btl remortgage deal.
