Remortgaging Your Buy-to-Let: When, Why, and How

Remortgaging is one of the most impactful financial decisions a landlord makes. Done well, it reduces your costs and funds portfolio growth. Done badly (or not at all), it costs you thousands in overpaid interest.

When to remortgage

• Fixed rate ending: 2-3 months before your current deal expires, start shopping. The SVR (standard variable rate) is typically 2-4% higher than available fixed rates
• Property value increase: If your property has risen in value, your LTV has dropped — qualifying you for better rates
• Equity release: You want to pull out equity for a deposit on another property
• Better rates available: Even mid-deal, if rates have dropped significantly, the savings may outweigh early repayment charges

Product transfer vs full remortgage

A product transfer moves you to a new deal with your existing lender. It's faster (no valuation or legal work), cheaper, and simpler. A full remortgage moves to a new lender — more paperwork but potentially better rates or the ability to release equity.

Releasing equity

If your property has increased in value, you can remortgage at up to 75% LTV and take the difference as cash. Example: property worth £250,000, current mortgage £150,000. At 75% LTV you could borrow £187,500 — releasing £37,500 for a deposit on another property.

Costs to factor in

• Early repayment charge: Typically 1-5% of the outstanding balance if you leave a fixed rate early
• Valuation fee: £150-£500 (often free with certain deals)
• Solicitor/conveyancer: £300-£800 (sometimes offered free by the lender)
• Arrangement fee: £0-£2,000 depending on the product (can be added to the loan)
• Broker fee: £0-£500 if you use a mortgage broker

Stress testing and affordability

Buy-to-let lenders assess affordability using a stress test — typically requiring rental income to be 125-145% of the mortgage payment at a stressed rate (usually 5.5% or the pay rate + 2%, whichever is higher). If rents haven't increased but rates have, you may qualify for less than before.

Tax implications

Mortgage arrangement fees and broker fees are not allowable revenue expenses — you can't deduct them from rental income. However, they may be deductible against capital gains when you sell, depending on circumstances. Mortgage interest itself is subject to Section 24 restrictions for individual landlords (20% tax credit only).

Keep records in Tendmere

Log your mortgage details, rate expiry date, and associated costs in Tendmere. Having your rental income and expense history readily available speeds up mortgage applications — lenders often ask for 2 years of rental accounts.