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Remortgage
If your fixed or tracker deal is ending, or you want to release some equity from a rental property, a buy to let remortgage lets you move to a new deal instead of rolling onto your lender's standard variable rate. Here's how the process, criteria and stress test work.
A buy to let remortgage is when you replace your existing buy to let mortgage with a new deal, either with your current lender (a product transfer) or by switching to a different lender entirely. Most landlords do this when their existing fixed or tracker deal is ending, to avoid moving onto the lender's standard variable rate, or to release some of the equity built up in the property.
Buy to let mortgages are not regulated by the Financial Conduct Authority for most landlords, though consumer buy to let mortgages, where the property was or is occupied by a close family member, are treated differently. Speak to an advisor to confirm which rules apply to your situation.
A buy to let remortgage is the process of replacing your current buy to let mortgage with a new deal, whether that's with a different lender or a new product from your existing one. It's separate from remortgaging your own home, and it comes with its own criteria around rental income, ownership structure and lending limits.
Most landlords start looking at a buy to let remortgage three to six months before their current fixed or tracker deal ends, because their lender's standard variable rate is usually the most expensive option available. If you're weighing this up, our remortgage hub covers the basics for residential and buy to let borrowers alike.
There are two routes: switching lender, which is a full new application assessed against the wider market, or a product transfer, which keeps you with your current lender and is usually a lighter-touch process. We cover the difference in more detail further down this guide.
There are several reasons landlords choose a buy to let remortgage, and most come down to timing, cost or a change in plans. Below are the most common triggers we see. Whatever the reason, it's worth remembering that your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it, so any decision to switch or borrow more should be weighed carefully.
Common triggers
Your fixed or tracker deal is ending
Once your current deal expires, you'll usually move onto your lender's standard variable rate unless you remortgage or arrange a product transfer beforehand.
You want a more competitive deal
Comparing the wider market rather than accepting your existing lender's renewal offer can uncover better terms for your circumstances.
You need to release equity
If your property has grown in value, remortgaging can release some of that equity for a deposit on another property, home improvements or other plans.
You're expanding your portfolio
Landlords adding to a portfolio sometimes remortgage existing properties to raise capital for a new purchase.
You're switching to a limited company structure
Some landlords remortgage out of personal ownership and into a limited company (SPV) for tax reasons, which we explain later in this guide.
Buy to let remortgage rates change frequently, so we don't publish specific figures here - they'd be out of date within weeks and wouldn't reflect your individual circumstances. Instead, here's what each type of deal actually means for you.
An advisor can talk you through current buy to let mortgage rates and how they might apply to your circumstances, along with which deal type suits your plans for the property.
Deal types explained
An advisor can talk you through fixed, tracker and standard variable rate options based on your rental income and how long you plan to hold the property.
Before approving a buy to let remortgage, lenders check that the property's rental income comfortably covers the mortgage payment - this is known as the rental stress test. It's designed to make sure you could still afford the mortgage if interest rates rose or the property sat empty for a period.
The exact calculation varies by lender, but the principle is the same: your expected rental income needs to clear the mortgage payment by a set margin, calculated using a notional interest rate rather than your actual deal rate. Higher-rate taxpayers are typically held to a stricter test than basic-rate taxpayers, partly because of how mortgage interest relief works for personally-owned properties.
Worked example: say a property is valued at £250,000 and you're remortgaging at 75% loan-to-value, meaning a mortgage of £187,500 and £62,500 in equity retained. The lender will still want to see that the rental income clears their stress test threshold on that £187,500 loan before approving the remortgage. If the rent falls short, you may need to reduce the loan amount, look at a lender with a different test, or explore a limited company structure, which some lenders assess differently.
The stress test catches out more landlords than the deposit requirement does. If your rental yield is on the lower side, you might need to put down more than the lender's headline minimum deposit to make the numbers work, or consider lenders that assess affordability differently for limited company applications.
Most buy to let remortgages are capped at a maximum of 75% loan-to-value (LTV), meaning you'll need at least 25% equity in the property. A smaller number of lenders will stretch to 80% LTV, though usually with a stricter rental stress test and a smaller pool of products to choose from.
The amount you can borrow also depends on the rental income the property can achieve, not just its value, so a high-value property with modest rental income won't necessarily support a larger loan. Our BTL mortgage calculator can give you a rough idea of what might be achievable based on your figures.
If you own four or more mortgaged buy to let properties, you're classed as a portfolio landlord, and lenders assess these applications against underwriting standards set out by the Prudential Regulation Authority, looking at your whole portfolio's finances rather than just the property you're remortgaging.
Equity and LTV
Since Section 24 of the Finance Act 2015 was fully phased in, landlords who own property in their personal name can no longer deduct mortgage interest from their rental income before calculating tax - instead, they receive a basic-rate tax credit. This has pushed many landlords to consider remortgaging into a limited company, often through a Special Purpose Vehicle (SPV), where the company pays corporation tax on profits and can still treat mortgage interest as a business expense.
It isn't the right move for everyone. Moving a property into a limited company usually means selling it to the company, which can trigger stamp duty and capital gains tax considerations, and lender choice for limited company buy to let mortgages is narrower than for personal ownership, sometimes with different rental stress test rules.
This is general information only, not tax advice. The right structure depends on your income, portfolio size and long-term plans, so it's worth speaking to a qualified accountant alongside a mortgage advisor before making a decision.
A buy to let remortgage typically takes four to eight weeks from application to completion, though a straightforward product transfer can be quicker. Most advisors recommend starting the process three to six months before your current deal ends, to leave enough time to compare the market and deal with any valuation or underwriting delays.
Step by step
Check your current deal end date and any early repayment charge
Find out when your fixed or tracker deal ends and whether leaving early would trigger an early repayment charge (ERC).
Get an up-to-date valuation
An accurate property value and estimated loan-to-value gives you and your advisor a realistic starting point for comparing deals.
Confirm your rental income
Your advisor will run a sense check against typical stress test requirements before recommending lenders.
Compare deals across a wide range of lenders
Rather than accepting a product transfer from your existing lender, an advisor can search across the wider market for a more suitable deal.
Submit your application and complete the legal work
Once you've chosen a deal, your application, valuation and legal work typically take four to eight weeks through to completion.
Access expert advice with no pressure to proceed.
A product transfer means staying with your existing lender and moving onto one of their new deals, usually with a simpler process and no fresh affordability assessment. A full remortgage means applying to a new lender, which involves a new valuation, application and underwriting, but opens up options across a wide range of lenders rather than just the one you're already with.
Product transfers can suit landlords who want a quick, low-hassle switch, particularly if their circumstances have changed in a way that might make a new lender's underwriting harder to pass. The trade-off is that you won't know how that deal compares to the rest of the market, and lenders don't have much incentive to offer their most competitive terms when you're not shopping around.
As brokers, we compare a wide range of lenders rather than defaulting to a product transfer, so you can see how your existing lender's offer stacks up against the alternatives before deciding.
Alongside the deal itself, there are several costs to budget for when remortgaging a buy to let property. Some are one-off, and some only apply if you're leaving your current deal early.
It's worth weighing these costs against what you'd save by moving, particularly if an ERC applies - sometimes it's more cost-effective to wait until your current deal ends. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it, so it's worth taking the time to get this decision right rather than rushing to switch.
Having a poor credit history doesn't automatically rule out a buy to let remortgage, but it does narrow your options. Mainstream lenders tend to be cautious about missed payments, defaults or County Court Judgments (CCJs), while a smaller group of specialist lenders assess adverse credit cases individually, often looking at how long ago the issue occurred and how it's been managed since.
You may need a larger deposit or face a smaller pool of lenders, and terms are typically less competitive than for a clean credit profile. If this applies to you, our guide to remortgage with bad credit goes into more detail on what lenders look for and how to improve your chances.
If you're worried about keeping up with mortgage payments or managing other debts, impartial guidance is available from MoneyHelper on 0800 138 7777.
Common questions
A typical buy to let remortgage takes four to eight weeks from application to completion, though this can vary depending on the lender, the complexity of your income evidence, and how quickly the valuation and legal work are completed. Starting three to six months before your current deal ends gives you a comfortable buffer.
It's possible if you're planning to move into the property yourself, but you'll need to tell your lender and go through a full residential affordability assessment, which is different from a buy to let application. Lenders will want to know why you're changing the use of the property, and some may require you to have owned it as a rental for a minimum period first. Speak to an advisor if you're considering this, as the criteria differ significantly from a standard buy to let remortgage.
Most lenders classify you as a portfolio landlord if you own four or more mortgaged buy to let properties. Under underwriting standards set out by the Prudential Regulation Authority in 2017, lenders must assess your entire portfolio's finances, not just the property you're remortgaging, which can mean more paperwork and a more detailed affordability review. Some lenders don't offer portfolio landlord products at all, so your choice of lender may be narrower than for a single-property landlord.
Yes, provided you have enough equity in the property and the rental income supports the higher loan amount under the lender's stress test. Landlords commonly release equity to fund a deposit on another property, cover renovation costs, or consolidate other borrowing. Keep in mind that increasing your buy to let mortgage increases your monthly costs and the amount secured against the property, so it's worth speaking to an advisor about whether it's the right move for your circumstances.
Yes, in most cases you'll need a solicitor or licensed conveyancer to handle the legal work of registering the new mortgage, even for a straightforward remortgage. Some lenders include this as part of a legal fee package, while others require you to arrange and pay for it separately. Your advisor can tell you whether the deal you're considering includes legal work or not.
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