You may already have a financial adviser or mortgage broker that keeps you updated on the latest mortgage rates and lets you know when it might benefit you to change products.
If not, we’d recommend reviewing the way your property or portfolio is financed every 12-24 months. New products are coming onto the market all the time, with different terms and interest rates, so it’s worth speaking to an independent mortgage broker periodically to discuss your re-mortgaging options.
How re-mortgaging can benefit you
1. Secure a better interest rate
There may be a better deal out there that could save you some money each month, increasing your rental profits. Even if you’re within the tie-in period for your current product, it may still be worth switching if the difference in interest rates can more than cover the redemption penalty. And if you’re currently on a variable or tracker rate, it might be worth considering a fixed rate to make budgeting easier.
2. Use equity to pay for improvements
Instead of having to use your own savings to pay for improvements to your property, if you’ve got enough equity, you could use some of that - essentially ‘recycling’ your capital. And if the work you’re doing adds more to the property value than the improvements cost, it may well make sense to release funds through re-mortgaging.
Something like an extension might also help generate more monthly rental income, so you could end up with property improvements that don’t cost you any of your own money, raise the value of your investment and increase your monthly profits!
3. Release funds for re-investment to get a better return
If you bought a property all-cash or have owned it for a number of years and seen a good increase in the value, you might be able to get a better return on your invested capital by increasing your borrowing. It’s worth speaking to a financial adviser to find out whether pulling money out of a property to reinvest elsewhere might be a good move for you.
(Remember that if you have four or more properties, you’re classed as a ‘portfolio landlord’ and the total borrowing across your portfolio can’t exceed 75%.)
4. Release a lump sum to enjoy!
If you’ve got a good amount of equity in a property, why not release some of it to enjoy? You could take a dream holiday, upgrade your car or just boost your bank account so you can treat yourself whenever you like. If you can re-mortgage onto a lower interest rate, it could cost you very little to do.
If you’d like to find out more about the latest buy to let deals, you can book an appointment with our partners, Embrace Financial Services, via our website.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Embrace Financial Services usually charges a fee for mortgage advice. The precise amount of the fee will depend upon your circumstances but will range from £499 to £999 and this will be discussed and agreed with you at the earliest opportunity.
Please be aware that the information provided within these archives has been pre-published, as of the date published on each article. The information contained within, including references to taxation, legislation, regulation, or any other issues or concerns may no longer apply.