80% Loan to value Let to Buy – Getting the maximum Remortgage amount by converting existing property into a Let to Buy
Let to buy remortgages have traditionally been capped at seventy to seventy-five per cent of the property value. These options remain available and often attract good rates. However, there is a growing bank of 80% Loan to value let to buy remortgage most of which have restricted access via buy to let mortgage brokers, such as Niche Advice.
The back drop is important to remember though, by this I mean the Mortgage Lender’s surveyor must share in your optimism on the property value, particularly as the buy to let market has been relatively flat since the Chancellor imposed a greater level of taxation. A good start point is Zoopla or Rightmove as the Mortgage Lender’s Surveyor will probably reference recently sold properties of a similar size and statue in their report.
The other main consideration is the rental assessment which the Mortgage Lender will apply, this normally is indexed against the Product payrate, which in turn are often higher to reflect a greater loan-to-value, so low rental yields can often hinder borrowing.
Product selection is therefore key in maximising borrowing potential on an 80% Loan to value let to buy remortgage, for example (based on mortgages as at 3/9/19):
Property value £400,000. Rental income £1,600pcm. Higher rate tax payer.
High street lender £265,358 as a maximum mortgage.
Mortgage broker lender £320,000 as a maximum mortgage.
That’s a difference of £63,642, which if funding an onward purchase deposit could result in a far more desirable property.
Niche Advice offers appropriate advice to applicants looking to take on two mortgages including those who want to let to buy. To find out more please complete the Contact Form on this website or call T: 020 7993 2044.
Author: Payam Azadi
Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines.