Buy to let remortgage rates have been strong in the second half of 2011 however the Euro situation is putting a large amount of pressure on Banks to conserve capital. In plain English that means – not lend money. At the moment we’re only seeing a slight impact on the UK mortgage market but if things become worse for Greece and Italy the situation could have a big impact on your plans for next year.Many landlords are putting off looking at new deals for their buy to let mortgage while base rates are low and with uncertainty over future rates they would prefer to see how things unfold. This isn’t a bad strategy in normal circumstances as it’s becoming clear that taking a fixed rate now may not be necessary as many analysts are now reporting that base rate could be unchanged in as much as two years time.
Having said that many buy to let properties could be remortgaged onto a better variable rate than they are currently sitting on. This is especially important if you hold any properties with one of the lenders that have closed to new business. Not only can you get a better rate now – while you wait out to see if you want to fix in the future but if credit conditions worsen and you cannot move your property to a new lender – the lender that is closed for new business is unlikely to offer you any good new rates either (some will offer no rates at all).
If as many are now predicting a base rate rise is 1-2 years away then taking a hundred pounds a month saving now rather than simply sitting on your old deal could hold significant benefits. It is really important to not underestimate too the risks posed of being ‘stuck’ with a lender during any short crunch in the market – some landlords were stuck with their entire portfolio on rates they didn’t want for as long as two years in the last crunch.
There are also a number of fixed rates becoming available for landlords – including some competitive 5 year deals. These will often be slightly more expensive than current trackers but with the huge amount of uncertainty in the market if your rent is comfortably more than the 5 year fixed rate you are able to lock in a certain period of profit with a buy to let remortgage now rather than simply enjoying some short term larger profits and a very uncertain future.
If you’re not sure whether now is the time to apply for a buy to let remortgage onto a fixed or variable rate, discuss your requirements with one of our advisers by completing the form below. This article is a news style update on the current market and likely risks and should not be taken as financial advice – that is only available through our authorised advisers on the phone.