Buy-to-let remortgaging deals withdrawn: do you know the best rates still available?

The number of buy-to-let remortgaging deals has fallen by a lot more than 40% since the beginning of March, but some landlords is going to be much harder hit than the others.

Landlords looking to change to a cheaper mortgage amid the coronavirus outbreak will find their options and also the rates they’re offered will be different significantly based on their required loan-to-value (LTV) ratio.

Those borrowing a high proportion of their property’s value are facing the best challenge, without any deals left at 85% LTV, according to Which? analysis of Moneyfacts data.

Here, we let you know that to refinance your portfolio, what rates you may expect, as well as your options if you’re borrowing at a high LTV level.

Why exist fewer buy-to-let mortgage deals?

It’s been a tumultuous here we are at the mortgage market since March, with three big changes resulting in the number of deals dropping dramatically.

First of, the financial institution of England base rate, which governs the price of borrowing for lenders, fell twice.

Then, the government introduced loan payment holidays for homeowners and landlords. By 28 April, more than 1.6 million households had requested one, producing a significant strain on bank resources.

Finally, the government’s stay-at-home measures make it impossible to handle in-person mortgage valuations, resulting in some lenders reassessing their ranges and pulling their higher-risk deals.

Buy-to-let remortgages visit 41%

In a little less than two months, the number of buy-to-let remortgaging deals has fallen by 41%, as shown within the table below.

Can I still remortgage?

As you can observe above, you may still find a lot more than 1,000 products available, so there’s lots of opportunity to switch if you’re coming to the end of your fixed term.

For many borrowers, it will almost be business as always, but there are some challenges for landlords borrowing at high LTVs.

We’ve crunched data from Moneyfacts and found the number of deals at 75% LTV or above has fallen most of all, with 80% and 85% LTV mortgages the biggest casualties.

As the table below shows, the amount of deals at 75% LTV has a lot more than halved, but at 80% it's dropped from 279 to simply 42.

Borrowers at 85% LTV had always been restricted to a number of lenders and deals, but now there are no options at all.

Best rates on buy-to-let remortgages

Average rates on buy-to-let mortgages dropped slightly from 3% to two.97% between March and April, however this is a market where deals vary hugely depending on the size your equity.

The interactive chart below shows the very best rates that were available at the outset of March (the red bar), compared with what’s currently available (nowhere bar).

As you can observe, at 65% and 75% LTV there’s been little alternation in the cheapest rates, with introductory rates of below 2% available on both two-year and five-year fixes.

At 80%, far fewer deals means much higher rates. On a two-year fix, the cheapest mortgage has increased by 0.5%, but on a five-year fix it’s risen by 1.15%.

Will lenders return to the market?

Research through the broker Mortgages for Business discovered that lenders are beginning to return to the buy-to-let market, that could mean more deals becoming available soon.

It says four lenders that initially withdrew their buy-to-let deals – Clydesdale, Kent Reliance, Precise and Santander – have now returned, and Saffron Building Society has said it'll follow later this year.

The likes of HSBC, Foundation, Vida, Platform and Together are all yet to come back.

Mortgages for Business says there are 42 active buy-to-let lenders, compared with 49 at the start of 2021.

‘Desktop’ valuations could help landlords

As we mentioned earlier, not being able to carry out in-person mortgage valuations is one of the reasons the brakes happen to be placed on the marketplace, but lenders are increasingly finding ways for this.

Some landlords with more straightforward remortgaging cases may find their lender is willing to process their application based on a ‘desktop’ valuation.

And these may become more common. Earlier this week, The Mortgage company announced it would offer desktop valuations on buy-to-let deals up to 75% loan-to-value. Shawbrook, Kent Reliance and Paragon have previously adopted similar systems.

Landlords borrowing at higher LTV levels or individuals with more difficult portfolios (such as Houses in Multiple Occupation) may find they can arrange a mortgage in principle with a lender and then have an in-person valuation undertaken in the end from the process, following the lockdown rules are relaxed.

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