BTL Remortgage

armour

As I see it, the 18 mth 4.19% fixed would cost £327.85/month over the 18 mths (with the fee factored in). I'd be tied to them for 18 mths but I'd have the security of knowing the rate won't go up. I just feel that, as mortgage rates (inc. BTL's) are slowly coming down, I may be able to get a better rate next year.
Somethingcorporate, I can't see what extra risk there is for the lender if insurances against non payment by tenants etc are in place. Indeed, when I first started letting, the Nationwide gave me consent to let and didn't charge any more than their residential rate.

AskMeAnother

It's more risky for the lender purely because if things go wrong for you financially and you have 2 mortgages to pay - which one are you likely to stop paying first? The BTL right will always lose out versus your own home.

Also, it's much more likely that a tennant would not pay your rent, than you would not pay your own mortgage, so there is certainly a little more risk when it comes to lending in the BTL sector.

Insurances are great and certainly recommended, but they are not obligatory and therefore cannot be replied upon for a lender when carrying out risk assessment.

armour

Fair point AMA. I know I'm not going to default but lenders go by statistics I suppose.
I guess my original query was and still is, does the forum think that BTL mortgage rates will reduce further over the next year or two?

Thrugelmir

armour wrote: »

Somethingcorporate, I can't see what extra risk there is for the lender if insurances against non payment by tenants etc are in place.

No tenants no income. That's the basic risk.

Thrugelmir

armour wrote: »

I guess my original query was and still is, does the forum think that BTL mortgage rates will reduce further over the next year or two?

Reduce to what level?

jimjames

Market Harborough BS are offering 3.85% as 1.64% discount for the life of the mortgage with no penalties.

They also offer a lifetime tracker at 3.49% above base (so matches the deal you wanted) but personally I think that could be very uncompetitive when rates rise in future.

AskMeAnother

armour wrote: »

I guess my original query was and still is, does the forum think that BTL mortgage rates will reduce further over the next year or two?

Well, I think it's optimistic to expect much more from the BTL lenders. The only reason rates will decrease IMO is if more lenders try to compete in this sector pushing rates down purely due to supply levels and competition.

All I can say if if I had a deal going onto 4.99% i'd be thinking it's time to look around. I'm not saying it's an "auto change" by any stretch, but there are defo savings to be had now if you want them. I don't think I would rely on rates dropping any further as a reason for not doing anything.

armour

Thanks for your replies.
JJ - That Market Harborough one sounds good. When the base rate rises to something more normal (5 or 6%), I imagine the SVR would rise to 6 or 7% meaning I'd be paying below base rate.
You've given me food for thought.

Thrugelmir

armour wrote: »

When the base rate rises to something more normal (5 or 6%), I imagine the SVR would rise to 6 or 7% meaning I'd be paying below base rate.

Highly unlikely your'll be paying below base rate. Forget recent normal. That was unusual and highly unprofitable for the lenders.

Think SVR 2.5% above base.

jimjames

Thrugelmir wrote: »

Think SVR 2.5% above base.

Absolutely, which is why I think 3.49% above base will be a bad deal once rates rise. On the plus side there are no exit fees but you need a few years to recoup the initial fees.