remortaging a kind-of-buy-to-let

pol73

I got married last year and bought a house with my new husband, letting out the house that I already owned. The house had been remortgaged (along with some other financial commitments) in October following some catastrophic mortgage advice, at a rate of 6.29%. When I rented the house out, an additional weighting of 1% was added to the repayments because I was no longer living in the property. This increased the rate to 7.29% I come out of the fixed rate in a couple of weeks but needed some advice about remortgages. I expected the repayments to drop substantially but they haven't. My lender is offering me a deal at 5.9% but will still add the 1% so it would stillbe at a rate of 6.9% which seems a little high! I would still need a mortgage for around 85% of the property's value and am not sure whether the mortgage would have to a be a buy to let mortgage as I am no longer living it? (all the BTL mortgages I have seen will only lend up to 70% of the value) Am i trapped with my current lender or can i use a normal mortgage? Any advice would be welcome!

grey_lady

I did hear a couple of months back of an 80% BTL at 4.99%
is there any way you could pay the balance down 5%?

herbiesjp

Yes it would need to be a BTL.

Yes you can get an 80% remortgage deal, assuming the rental income is enough to agree that mortgage amount for the lender's rental calculation.

And the arrangement fees can be pretty high depending on he figures you are looking at.

anselld

Can you raise any more capital against the house you are living in? That will be much cheaper than any BTL rate and you can still offset interest against rental income provided you can show that the capital was used soley for the rental business (ie by paying off some or all of the BTL mortgage)