Many buy-to-let landlords with two and three year fixed deals that are coming to an end at the moment and early 2019 are facing difficulties in their quest to remortgage their property.
A number of landlords obtained two or three year fixed rate mortgages in March 2016, looking to avoid the 3% surcharge being introduced for new buy-to-let and second home acquisitions a month later.
As the end of these existing deals is rapidly approaching, it is evident that many landlords will struggle to refinance. Many will therefore automatically be transferred on to the standard variable rate set by their lenders, which tends to be significantly more expensive.
Why, I only want to Re-mortgage at the same level?
Compared to two years ago when the attractive mortgage deals were agreed, there are now much tighter lender criteria that may prevent landlords from securing new deals.
With a significant lack of refinancing options and the difficulty in finding the finances that they need, Greg May, director of financial services at Romans, is among those that believes many landlords will now exit the private rented sector.
May said: “Landlords who bought before the stamp duty increase in 2016, are not only at risk of overpaying by being automatically transferred to the lender’s standard variable rate product, but may also find securing a new deal increasingly difficult due to the changes in mortgage lending criteria.”
May added: “Landlords who borrowed at the higher end of the loan to value threshold are likely to feel the changes to lending criteria the most. “Those who are unable to remortgage may be able to transfer onto a different product with their current lender but this does mean that their options are extremely limited.
“Ideally, landlords want to be able to pick between a number of different products from a variety of lenders in order to find the right deal for their circumstance.”
The team at Elite Corporate Solutions have access to a broad range of lenders who offer flexibility for landlords who are looking to re-mortgage at the end of a fixed term loan and can help save you thousands of pounds.
Please contact a member of the team on 01482 635400 or click here to leave your details and a member of the team will contact you to review your Buy-to-Let mortgage.