Regardless of the size of your portfolio or your investment aspirations, the smart advice for landlords is to assess whether you have optimised the structure of your finances.
We’ve asked specialist financial advisors Just Mortgages to share their observations of the opportunities:
Increased property growth can secure lower interest rates
As property values have continued along a sustained growth trajectory over the past decade, some landlords could have a more positive loan to value (LTV) rate compared to when their mortgage was last reviewed. Positive equity relative to the value of the property may mean you can now access lower interest rates.
New mortgages available
Lenders are keen to attract investors so they’re continually striving to be as competitive and innovative as possible and as such there are often new products becoming available to the market.
What a better interest rate can mean for Landlords
If you’re able to secure a lower interest rate then you have a range of options to restructure your finances, depending on your individual circumstances.
Reduce your monthly payments: This option could allow you more headroom between the amount you receive in rent and the monthly repayments. This could be an option if you’re worried about the impact of reduced mortgage interest relief.
Pay the debt off more quickly: If you don’t need to make any monthly savings on your mortgage costs, then you could keep monthly repayments around the same, and reduce the term of the mortgage.
Fund improvements: If your property requires some improvements, for example if it has an energy efficiency rating of F or G, you could consider utilising some equity at the same time as re-mortgaging. This could allow you to make the necessary improvements to your property’s EPC rating.
Options for growth
Alternatively, you may want to consider changing your financial arrangements to increase your portfolio. An improved LTV rate of one property could allow you to release some equity to help finance an additional property.
Regardless of your individual circumstances, you could benefit from the combined effect of increased property values, and historically low interest rates.
Talk to us about how Just Mortgages can review your current mortgage arrangements.
Just Mortgages offer full advice and recommendation based on your needs and circumstances. Get in touch on 01206 812395 or email Info@justmortgages.co.uk