Many people start off investing in one buy to let property and then move on and build a small portfolio of properties. However, if you start reaching 4, 5 or 6 properties, you are probably finding you need to borrow from multiple lenders and are spending more time renegotiating mortgages and having to repeat yourself in explaining the make up of your property portfolio to different banks or building societies.

This where we can help - within MoneyMaxim we have decades of experience in providing loans and mortgages to both personal and business clients. We also have a panel of brokers and lenders we work with who provide finance ranging from a remortgage of £25,000 to multi million pound deals.

If you ask us to help, we will consider your application, discuss it confidentially with our panel members and then call you back with our suggestions as to the best way forward. We frequently will suggest talking to a couple of companies as this can both help you understand your options more clearly and provide greater choice.

Why are Multiple Buy to Lets Assessed Differently by Lenders?

Basically lenders feel that once your portfolio grows to this sort of size you are starting to become a professional property portfolio owner rather than someone who has one or two properties to provide a long term investment.

However, when you have more than three but less than half a dozen properties you still have options, and we can help you decide whether combining your properties and using one lender would bring you benefits which outweigh the costs of making the change.

What are the advantages of combining my Buy to Let Mortgages?

The benefits of combining separate Buy to Lets onto a single BTL Portfolio Mortgage include:

• Your time and money spend on mortgage administration falls dramatically. With just one monthly payment, mortgage statement and interest charges for your whole portfolio it just makes life simpler. Additionally with flexible portfolio mortgages you can add or remove properties with greater ease and less cost than having to remortgage them. When you consider the fees involved in remortgaging this can mean huge savings.
• It's easier to 'share' your equity across all your properties to fund new purchases. As it's the combined value of your portfolio that drives your loan to value rather than each individual borrowing, you can save a lot of remortgaging and the related costs involved in it.
• Tax benefits including creating a Limited Company to 'own' your portfolio meaning you will be paying corporation tax rather than income tax on your profits or transferring the borrowing away from your residential mortgage and switching it to your Buy to Let properties, thus enabling you to keep as little borrowing as possible on properties where mortgage interest relief cannot be claimed.

Please note you should always seek independent tax and legal advice when restructuring your finances.

Different Options for Buy to Let Portfolio Mortgages

Standard Portfolio Mortgages

Here you take out a combined mortgage over a number of properties. If you have not yet acquired the properties you are normally allowed a number of months to find and complete on the purchases. If you wish to add to your portfolio you can do so but a new application will be required and there may well be a minimum level of new lending required. Fixed and Floating interest rate options are normally available, but be aware that if you take on additional borrowing it may be at a different rate to your existing loan.

Flexible Buy to Let (BTL) Portfolio Mortgages

Here you have a rolling facility allowing you to borrow up to a certain limit as long as you maintain a set Loan to Value ratio. Therefore it is likely that part of your lending limit will be drawn (used) and part undrawn (non-utilised). In these situations you will pay interest in the normal way on the drawn facilities, but may also have to pay a smaller amount for the funds that have been earmarked for you but are not being used. These are called non utilisation fees.

The advantage of having a discussion with our specialists is that they will be able to assess your particular situation and help you decide which way forward is best for you.

Interest Rate Management for Buy to Let Mortgages

Another potential advantage with some Buy to Let Portfolio Mortgages is the ability to adopt more sophisticated interest rate management tools.

Again this needs careful investigation as interest rate hedging products need to be fully understood, but they can also afford long term protection against fluctuations in the market.

Learn more about Buy to Let Portfolio mortgages

Our team will be delighted to discuss your Buy to Let portfolio requirements. Call them on 0118 321 8197 - or pop your details into our form to the right and we will be in touch as soon as possible.

Having understood your requirements we will arrange for the most appropriate brokers and lending partners on our panel to contact you. Please be aware that fees and rates are likely to differ between the companies, and therefore we recommend you seek advice from a number of sources.

Our Buy to Let portfolio mortgage service is provided by:

UK Financial Consultancy Services Limited,142-143 Parrock Street, Gravesend, Kent, DA12 1EY who are authorised and regulated by the Financial Services Authority. Their FCA number is 435495.

and

Commercial Trust Limited 25-27 Surrey Street, Norwich, Norfolk, NR1 3NX. (Postal address: Commercial Trust Limited, Norfolk Tower, 48-52 Surrey Street, Norwich, NR1 3PA) who are authorised and regulated by the Financial Conduct Authority. FCA Registration number 610175.

You also have the added reassurance of a MoneyMaxim consultant on hand in case of any queries or additional guidance.

Larger loans may be introduced to other panel members if they are considered more suitable but, as discussed, this will be talked through with you before an introduction is made.

Image courtesy of: Svilen Milev

This content was last reviewed on 01/04/2023