wow, mortgage payment (BTL) gone from £1100 to £2700 pcm (fixed rate ended). I have some options...

snickpan

dunstonh said:

BTL mortgage £345K this month reverted to 9.58%.  

That is an extremely high rate.    Are there any credit problems?

 She was only thinking "you don't want to lose rental income, how about a 5yr mortgage on the house you want to sell, and a 5yr mortgage on the big BTL?"  She was looking at 2 mortgage sales, I was looking at phase one of retirement!

Maybe she is not a financial adviser but a mortgage adviser.     Mortgage advisers will look at the mortgage arrangement. Most financial advisers don't do mortgages (some do but most don't as it is hard to be a jack of all trades nowadays).   Financial advisers look at the holistic overall picture, including tax.    The income on a mortgage case is small compared to what financial advisers normally deal with.   

Do you employ this adviser to give you retirement planning advice? (I wonder if it was just mortgage advice - hence the transactional nature of what she was saying rather than the overall planning nature).

She's in the Times top 20, I think that's says what a good sales person she is....

No-one takes any notice of lists like that as the majority of adviser firms and advisers don't enter such things.  

dunstonh said:

BTL mortgage £345K this month reverted to 9.58%.  

That is an extremely high rate.    Are there any credit problems?

 She was only thinking "you don't want to lose rental income, how about a 5yr mortgage on the house you want to sell, and a 5yr mortgage on the big BTL?"  She was looking at 2 mortgage sales, I was looking at phase one of retirement!

Maybe she is not a financial adviser but a mortgage adviser.     Mortgage advisers will look at the mortgage arrangement. Most financial advisers don't do mortgages (some do but most don't as it is hard to be a jack of all trades nowadays).   Financial advisers look at the holistic overall picture, including tax.    The income on a mortgage case is small compared to what financial advisers normally deal with.   

Do you employ this adviser to give you retirement planning advice? (I wonder if it was just mortgage advice - hence the transactional nature of what she was saying rather than the overall planning nature).

She's in the Times top 20, I think that's says what a good sales person she is....

No-one takes any notice of lists like that as the majority of adviser firms and advisers don't enter such things.  

9.58% is what the BTL rate reverts to once your lovely 5yr old 3% mortgage product ends.  
I once had a financial advisor, he advised me on getting a good pension, it made £800 in a year, he popped round for a catchup, assessed that everything was in order, checked that no addresses had changed, and charged me £800. 
I think she got in the top 20 'cos she rallied around all her clients to fill in a good review.

JMA74

snickpan said:

amnblog said:

Snickpan, the product you entered the link to above is not available to an existing KR borrower. You are looking at 5.99% with 1% going in and a 4% fee to exit so not smart if you have the property on the market.

I think the 5.99%. is a product, when that product ends, you're left with the standard variable rate, which on a Kent Reliance Buy To Let mortgage is 9.58%.  I'd to arrange a 5.99% mortgage with them, but if I pay it off in 6 months, the arrangement fee plus ECR 'fine' might make it too costly.  https://www.kentrelianceforintermediaries.co.uk/buy-to-let/mortgages/products/02247-kbtl2211.  5.94 interest, 2% arrangement, 1% ERC.. not bad, but is it worth losing 3% of the loan just to have lower payments till July.  I'll be needing my big pencil and pad, now that I'm not as stressed as this morning

The product you link to is for new borrowers only.  It is not available if you are coming to the end of your current deal and looking for a new deal.  Those products are available here:  https://www.kentrelianceforintermediaries.co.uk/buy-to-let/mortgages/product-transfer

If you are currently with Kent, and you want to take a new deal with Kent, then you can not have the 5.94% with 2% arrangement, 1% ERC.  It is only available for new borrowers

snickpan

no product = roughly 9%
a non specific product - roughly 6%

JMA74

No product - 9% and no fees
Product you can have - 6% with 1% entry fee and 4% exit fee

If you are selling in the first year are likely better off on the higher rate (without crunching the numbers) 

dunstonh

I once had a financial advisor, he advised me on getting a good pension, it made £800 in a year, he popped round for a catchup, assessed that everything was in order, checked that no addresses had changed, and charged me £800.  

Nothing wrong with that.  Everyone lost money on investments in 2022.  Yet charges remain.   Just as they do when, in the vast majority of years, it goes up.  (Average ongoing charge is 0.50% but average long term growth after charges is around 6.5%).  In a typical 5 year period, you get 3 good years, one barely nothing year and a negative year.  You shouldnt look at one year in isolation.  A good adviser would explain all that to you and that doesn't seem to have been the case.

I am just about to do a review where the portfolio adjustments made in the last review are being compared with doing nothing and he is over £20k up on the difference and the annual charge is £1150.  So, yes, he could have avoided my £1150 but he would be down over £20k if he had.   This review is likely to be a no-change review (although we may increase the gilt ratio slightly).    No change is still advice just as change is advice.

I think she got in the top 20 'cos she rallied around all her clients to fill in a good review.

All top xx lists do this in most areas of retail.   That is why you should totally ignore lists like that.   They are just marketing and not really beneficial to consumers.  

snickpan

well, I owe her a drink!  She applied for a new product for me, in October when the rates were a tad lower, I have till Jan 24th to sign up for 2 years at 5.74%, not bad for a BTL.  After 2 years the rate will revert to standard variable rate which is currently 8.4% (according to the offer paperwork).  In the meantime I have reduced that mortgage by the £200k retirement fund, so the payments will go back down to nearly £700, rather than the £2700.  I've lost used most of my savings, but I've lessened the amount of debt for now, and hopefully will be able to sell the house that's just gone on the market....    . Once that sells I can pay off an extra 10% of the BTL a year, bringing payments down to £560.   Not ideal, but possibly one of the better options.  Thanks for your advice and for listening.