BTL Remortgage - Worth doing?

shads1973

Hi people,

Maybe no definitive answer, I currently have the following

Skipton 5 year fixed BTL mortgage @ 4.29%. This ends in May 2018 (taken out in May 2013). The property at the time of the mortgage was done against a value of 120k (around 84k mortgage)

A flat in the same block sold around 3 months ago for 157k, making me think it might be a good time to re mortgage? The intial 5% redemption fee drops to 4% from June 1st 2016 (and then 3% for remaining year June 2017)

Would a 75% re mortgage be worthwhile?

MortgageMamma

Hi

You need someone to do that maths for you. Take all the details, quote for the very best value BTL mortgage available for your circumstances and do the maths to work out if the savings are significant enough (if any) to justify the remortgage. Are you looking to raise more capital or just for a straight remortgage?

dimbo61

Would paying 4% of £85,000 make good businesses sense ?
Could you speak to a whole of market broker who deals in BTL ?
Long term plans !
Do you intend to keep the property ? What about the Tax relief changes which come into effect over the next 4 years and CGT

silvercar

Do you need the extra money (remember it will need to be paid back at some point)?

Can you afford the extra borrowing (reduced profits on the rental income)?

You are paying 3% redemption fee now rather than waiting til 2018. You will also have new mortgage arrangement fees and valuation and legal fees. All money that you won't get back. It could be better to wait til 2018.

From a tax point of view remember you only get tax relief (that will reduce over the next few years) on the interest on the mortgage upto the value of the property when first let. So as 75% of £157k is fairly near the £120k purchase price, you are near the ceiling now.

shads1973

Thanks for the replies. To answer few of the questions

- No urgent need for the money. Have a pension/ISA etc which I'm actively contributing to. Guess in my head the thought of possibly adding another BTL using the cash generated from a remortgage initially appealed (though understand has been some recent changes on tax implications)

- The rental on the flat at present (which hasn't been increased in 2 years) is £650 per month against the mortgage of £303 (plus around £100 in service/ground/insurance charges). Guess I was hoping if someone had some idea of current BTL mortgages available and how they compared to the current 4.29% fixed deal in place (and obviously if there is any benefit when having to take account costs associated with redemption/new mortgage)