BTL Remortgage

armour

Hi all,
I currently have a base + 1.5% BTL mortgage (with the Principality building society) of £78,000. The flat was worth £180,000 3 yrs ago when I took this 3 yr deal out.
I'm due to go onto Principality's SVR (4.99%) on Jan 1, looking on their website I notice that they have a fee free 2 yr tracker ( base + 3.49%).
http://www.principality.co.uk/en/Mortgages/Buy-to-Let-Mortgages/Buy-To-Let-2-Year-Tracker-Fee-Free-Mortgage.aspx

This seems like one of the best deals out there but given that BTL rates are coming down, rather than tie myself in for 2 yrs, perhaps I should go onto the SVR & stomach the extra £65/month then look around next year.
Anyone care to give an opinion?

kingstreet

Is the product you describe available to existing borrowers coming to the end of a current deal? It may only be available to new borrowers remortgaging to the society.

I suggest you call them and ask them about their "customer retention" products for someone in your situation.

armour

Thanks for yuor reply Kingstreet, Just phoned them, they're to call back at 11.00. In your experince would that fee free deal be competitive for a low loan-to-equity BTL?

handytips

Its very competetive considering the likes of TMW and BM solutions arrangement fee's. There are also a number of other deals at your LTV that also may suit.

kingstreet

BTL isn't really my market and I answered your thread based on the general issue I mentioned. I would imagine a sub 4% BTL deal is decent today. Some of the others are much more tuned-in to the BTL sector and may have a different opinion.

There you go. There's a positive opinion before I even pressed the submit button!

AskMeAnother

The principality deal is very competetive and if they're able to offer it to existing customers you should definitely consider it.

From what I can see there are a few deals that works out as a similar total cost over the 2 year period, but there's a lot to be said for the ease of switching deals with your existing lender.

armour

As you suspected Kingstreet, the 3.99% rate isn't available.
They've offered me either:
18 mth fixed @ 4.19% (fee £999) or
3 year fixed @ 4.99% (fee £999)
I think I'd be better staying on the SVR for the moment.
I'm also surprised that BTL rates/fees are so high, particularly for loans with > 50% equity. Surely the lenders money could be classed as safe, so rates should be lower, or am I missing something?

somethingcorporate

What you are missing is that B2L is business with it's own higher risks than residential. Hence they charge accordingly.

It's an unfair comparison to compare residential rates to B2L rates.

AskMeAnother

There are deals available that are less than the SVR that you will be paying, even when taking into account the fees payable some of them are still worth considering.

If you work out the total amount payable over a 2 year period (if looking at 2 year deals) you may be suprised. Even the 4.19% you have been offered with a £999 fee works out better than staying on SVR for the whole 2 years.

abankerbutnotafatcat

armour wrote: »

As you suspected Kingstreet, the 3.99% rate isn't available.
They've offered me either:
18 mth fixed @ 4.19% (fee £999) or
3 year fixed @ 4.99% (fee £999)
I think I'd be better staying on the SVR for the moment.
I'm also surprised that BTL rates/fees are so high, particularly for loans with > 50% equity. Surely the lenders money could be classed as safe, so rates should be lower, or am I missing something?

A BTL mortgage is basically a business loan secured by the property, with a fixed (other than rent increases) debt servicing source. Viewed like this perhaps a longer term fixed rate gives you certainty. Plus this is a climate of historically low rates.

Thrugelmir

armour wrote: »

I'm also surprised that BTL rates/fees are so high, particularly for loans with > 50% equity. Surely the lenders money could be classed as safe, so rates should be lower, or am I missing something?

BTL lending rates are returning to post credit boom norms. Rates under 3% above BOE base are highly unlikely ever to return.

The smaller the debt owed, the less potential profit for the lender. Equity % is of no great interest providing the loan is secured.