What Birmingham Midshires Buy-to-let Trackers need to do
Is now the right time to switch your buy-to-let mortgage from BM Solutions variable Tracker to a Fixed Rate? Remortgage or Product Transfer.
Mortgage Trackers on the rise! Could this be the end of low interest rates for now?
I’m not going to pretend I’m an Economist but the warning signs are there for Tracker mortgage holders, even those with small loadings over Bank of England Base Rate such as BM Solutions buy-to-let trackers.
- The Consumer Price Index which measures inflation rose more in the 12 months to January 2022 than any other 12 month period since stats began in January 1997.
- Energy prices are already high and the price cap on domestic electricity and gas ends this month (31/3/2022).
- The Bank of England Monetary Policy Committee (MPC), the panel that sets interest rates, voted for an increase to 0.5% to BoE Base Rate in February. In was a close call with 4 of the 9 voters preferring a higher increase to 0.75%. In any event even the smaller move effectively doubled interest rate benchmark from 0.25%, itself a rise from the pandemic rate of 0.10% and highlighted the direction of flight.
It however fair to put this in perspective as in 2007 the rate was 5.50%. - Fresh off the press large mortgage provider NatWest part of The Royal Bank of Scotland have announced a second rate rise on their fixed rate in four days (10/3/2022 and 14/3/2022) supporting the worry on mortgage interest rates right now.
BM Solutions: Guard Against Rate Rises by Fixing Your Rate
My business partner Richard was at the official launch of the BM Solutions “One Minute” mortgage system all those years ago which revolutionised the buy-to-let market. Leading them to be ultimately owned by the Lloyd’s Banking Group, and being the recognised HBOS brand for buy-to-lets.
Thousands of BM Solutions buy-to-let customers will be on Bank of England Trackers with typical margins of 1.99% plus Bank of England Base Rate and must be seriously contemplating product transfers or remortgaging in light of the news. Remember product transfers with BM Solutions require little underwriting. Either way we can help with the process.
And, better industry news came from Nationwide on 2nd March 2022, one of the UK’s larger mortgage lenders, said it was the biggest cash increase in property prices since it started collecting comparable data in 1991. With the price of average UK homes moving to £260,230 in February. This could mean you have more equity in your buy-to-let than thought which may attract better rates.
Buy-to-let 5 Year Fixed Remortgage Rates
So what fixed rates are offer? Below gives details of the some of the remortgage rates currently on offer but don’t expect them to be there for long:
Buy-to-let 5 year fix with 40% equity
| Rate switch method | Remortgage to new lender | Product transfer with BM Solutions |
| Initial rate | 2.09% | 2.64% |
| Subsequent reversionary rate | 4.74% | 4.84% |
| The total amount you must pay back, including the amount borrowed is | £370,656.50 | £377,509.00 |
| Overall cost of comparison APRC | 4.1% | 4.3% |
| Type and initial benefit period | Fixed rate until 31/05/2027 | Fixed rate until 31/07/2027 |
| Minimum equity | 40% | 40% |
| Lender valuation fee | Free | Free |
| Lender booking fee | £Nil | £Nil |
| Lender product fee | £995 | £Nil |
| Cashback from the Lender | £Nil | £Nil |
| Basic legal costs | Free | Free |
| Lender name | The Mortgage Works | BM Solutions |
| Underwriting level | Full | Light |
| Our broker fee charge | From £499 | No charge |
Buy-to-let 5 year fix with 25% equity
| Rate switch method | Remortgage to new lender | Product transfer with BM Solutions |
| Initial rate | 2.09% | 2.98% |
| Subsequent reversionary rate | 3.75% | 4.84% |
| The total amount you must pay back, including the amount borrowed is | £419,208.36 | £475,777.75 |
| Overall cost of comparison APRC | 3.4% | 4.4% |
| Type and initial benefit period | Fixed rate until 02/06/2027 | Fixed rate until 31/07/2027 |
| Minimum equity | 25% | 25% |
| Lender valuation fee | Free | Free |
| Lender booking fee | £Nil | £Nil |
| Lender product fee | £1,499 | £Nil |
| Cashback from the Lender | £Nil | £Nil |
| Basic legal costs | Free | Free |
| Lender name | Santander | BM Solutions |
| Underwriting level | Full | Light |
| Our broker fee charge | From £499 | No charge |
Buy-to-let 5 year fix with 20% equity
| Rate switch method | Remortgage to new lender | Product transfer with BM Solutions |
| Initial rate | 2.94% | Not available to 80% loan-to-value |
| Subsequent reversionary rate | 4.49% | |
| The total amount you must pay back, including the amount borrowed is | £491,764.00 | |
| Overall cost of comparison APRC | 4.1% | |
| Type and initial benefit period | Fixed rate until 30/06/2027 | |
| Minimum equity | 20% | |
| Lender valuation fee | £Free | |
| Lender booking fee | £Nil | |
| Lender product fee | £995 | |
| Cashback from the Lender | £Nil | |
| Basic legal costs | Free | |
| Lender name | Accord | |
| Underwriting level | Full | |
| Our broker fee charge | From £499 |
If you are a Birmingham Midshires Buy-to-let client why not get in touch to see if we can save you money.
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NOTES
* Rates as at 12/3/2022.
* Figures produced using Twenty7tec software.
* True Cost factors in the interest rate, mortgage set-up costs, and any cashback rebates. It assumes the product fee is paid.
* The comparison is based on an assumed purchase price of £300,000 over a 25 year mortgage term.
* It looks at the repayment method of “Interest only” for Buy-to-let.
* Eligibility will depend on your own personal circumstances.
Your Property is at Risk if you do not keep up with your mortgage repayments.
Niche Advice arranges mortgages and is not a Lender.
