Many landlords need to remortgage before March

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In the first three months of 2016, there was a surge in commercial mortgage applications from buy-to-let landlords to purchase a property before the stamp duty increase in April 2018.

Many of them took out two-year fixed rate mortgages, and these are coming to an end. The Daily Mail reported last month that many of them might now need to get a remortgage arranged within the next few weeks.

Although there are plenty of lenders available to provide a commercial mortgage for buy-to-let property, many landlords may be faced with tougher lending criteria than they faced two years ago. Monthly interest rates on a new variable rate mortgage will be higher than their old fixed rate mortgage deal.

Two years ago, the maximum loan-to-value available was a lot higher than it is today. Currently, landlords will be able to get a 75% loan-to-value, but they may get better terms on a 60% loan-to-value commercial mortgage.

Portfolio landlords with four or more properties with mortgages are faced with new affordability rules. These mean that rents need to be between 125% and 145% of the mortgage payments. Previous loans could have been calculated at a lower rate.

It can take six to eight weeks between applying for a new mortgage and the funds being available. This means that most landlords who beat the stamp duty rise in 2016 need to research a new mortgage as soon as possible. A mortgage broker will advise landlords on their remortgaging options and will find the best suited mortgage deals currently available for buy-to-let landlords.

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