Why landlords remortgage
- A fixed or tracker deal is ending and the reversion rate would eat into rental profit
- Releasing equity to fund the deposit on the next rental property
- Funding refurbishment to raise the rent or the property's value
- Consolidating portfolio borrowing with fewer lenders on better terms
- The property has risen in value, unlocking a lower loan-to-value band
- Moving from an unsuitable product - for example onto interest only to improve cash flow
The same rental cover rules apply as on a purchase: the rent must exceed the mortgage interest at a stressed rate by the lender's margin. A property that has seen strong rent growth often supports substantially more borrowing than it did at purchase.
Releasing equity from a buy to let
Equity release on a rental property works by remortgaging for more than the current balance and taking the difference as cash - most commonly to fund the next purchase. This is the engine of portfolio growth: each property's gains become the deposit for the next.
How much you can release depends on two ceilings, and the lower one wins:
- Loan-to-value - buy to let remortgages typically run up to around 75% of the property's value
- Rental cover - the rent must still support the larger loan at the stressed rate
Lenders will ask what the released funds are for; onward property investment is a purpose they know well. If you are releasing equity from your own home rather than a rental - to fund a purchase or anything else - that is covered on our remortgage to release equity page.
How the process works
- Portfolio review: We look at the property, its rent, the current deal and - for portfolio landlords - how the whole book fits together
- Rental cover check: We test the rent against realistic stressed rates to establish the borrowing the property supports
- Whole-of-market comparison: Deals compared across all UK buy to let lenders, personal and limited company
- Application, valuation and legals: We handle the application; valuation and legal fees are free, as on all our remortgages
- Completion: The new lender repays the old mortgage and any released equity is paid to you
Timing mirrors a residential remortgage - typically four to eight weeks - so starting three to six months before the current deal ends avoids any time on the reversion rate.
Costs and fees
- Valuation - free on all remortgages we arrange
- Legal fees - free on all remortgages we arrange
- Lender arrangement fees - common on BTL deals; we compare deals on overall cost including fees
- Early repayment charge - only if you leave the current deal before it ends
- Our broker fee - typically £1,250, or up to £1,495 for specialist lending such as limited company buy to let
Your exact fee is confirmed with you in writing before you commit to anything - full details are in our regulatory statement.
Why use LifePro?
- Whole-of-market, independent mortgage brokers covering all of the UK
- Free valuation and legal fees on every buy to let remortgage
- Personal name, limited company and portfolio remortgages arranged
- CeMAP qualified advisers with 20+ years' experience
- Deal-end tracking across your portfolio so no property drifts onto a reversion rate
Most buy to let lending is not regulated by the Financial Conduct Authority; letting to close family members brings a case under regulated rules instead - your adviser will confirm which applies.
