With the inflation hiting a 40-year high of 10.1 percent in July, there has been an uptick in remortgage activity as homeowners are attempting to offset their cost of living struggles. According to UK Finance, around 430,000 two-year fixes are due to end in the second half of 2022, meaning borrowers who benefited from cheaper mortgage rates back in 2020 will now be facing much higher costs.
We were recently approached by two siblings looking to remortgage their BTL (buy-to-let) property to act on an opportunity. While it is natural to consider remortgaging at the end of your current term, you should also consider remortgaging any time you think you will get a more competitive rate or when you think you can take advantage of an upcoming opportunity such as a property investment.
The clients wanted a remortgage in order to raise capital to fund the deposit on a new property purchase. The existing buy-to-let property was owned in their personal names and had previously been lived in by their parents. Although the property was only let out for one month, this significantly restricted the number of lenders available to the clients.
When it comes to remortgaging, everything is negotiable – even if lenders typically only offer specific products. You will usually need to work with a broker to tailor a refinance package to your needs and negotiate effectively with lenders in a way that bears results, rather than simply making demands. In this instance, we were able to find a suitable lender for the remortgage and negotiate swiftly, securing a 65% LTV mortgage at an attractive rate of 2.89% with a 5-year fixed term.
If your current term is ending, move quickly and well ahead of time rather than waiting until the last minute to arrange to remortgage. Just because you already have a mortgage and you're not moving house, remortgaging still takes some time to arrange. A new lender will still need to underwrite your loan, value your property and assess your suitability for your remortgage. Contact Enness to have a no-obligation chat about your plans, to answer any questions or simply find out more about remortgaging.