Q. 'I have three buy-to-let flats in north London, all on fixed-rate deals which end later this year. I'll need to remortgage them – would I get a better deal if I switched all three to the same lender?' TS, London N11
A. You don't say how much you are paying on your existing mortgages, but with four interest-rate rises in less than a year, it's safe to say that you want to avoid paying your lenders' standard variable rates (SVRs) if at all possible. Many SVRs have now reached 7.5 per cent, which could well make a real dent in your rental income.
Unless all your fixed-rate mortgages expire on the same day, you will have to either pay the SVR for a short while, or arrange the new finance property by property. Remortgaging within the fixed-rate period almost always means paying early-redemption charges, and it is rare that it makes financial sense to do this so close to the end of a fixed rate.
However, Melanie Bien, a director at brokers Savills Private Finance, says that lenders will not usually offer a better rate for a small portfolio of properties. But they are likely to ask questions about the other properties, in order to ensure that you are not overstretching yourself. Lenders will also want to know that the rentals from your properties will cover the mortgages – especially as the mortgages might be more expensive than they are now.
This makes it all the more important that you shop around for the right deal. Mortgage brokers often have exclusive deals with particular lenders, so a good broker that knows the buy-to-let market should be your first point of call. They will also be able to look at your property portfolio and match each unit with the right lender. Lenders' attitudes to rental cover do vary, for example. If one property's rental cover is marginal based on today's rates, it might become more expensive to finance, but if cover is good on the others the broker can still remortgage those, rather than your whole portfolio, on a cheaper deal.
On a more positive note, there are more lenders in the buy-to-let mortgage market than there were even a few years ago when you last looked around. You might still find that there are good rates on offer, especially for shorter-term, fixed-rate deals.
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