Buy to Let Remortgages

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Some of the main reasons to remortgage a property are to raise extra cash for renovations, home improvements, debt consolidation or a one off purchase such as a holiday or new car.

If you already have mortgages on buy to let properties, remortgaging can free up equity in order to extend and improve your property portfolio or to improve the quality of your current properties, which may enable you to charge a higher amount of rent.

Landlords with a large portfolio of buy to let properties – so called “professional landlords” – will generally make a living from the  profit earned after mortgage payments and other charges have been paid.

More commonly a landlord may be a property investor who has an alternative source of income and mainly using the rental income to cover the costs of the buy to let mortgage and maintenance. In this instance profit may be made from the sale of the property in the future if the value has increased.

Ocean does not give investment advice. If you are considering investing in Buy to Let properties you may want to seek independent financial advice.

Worked example

Historically increases in property value over time provide an opportunity to remortgage and release some additional equity from the property. 

You should bear in mind that property values can sometimes decrease as well as increase.

For example if an investor takes out a mortgage with a loan to value of 75% on a property worth £100,000 the loan amount would be £75,000.

If, over a period of time, the property increases in value to £150,000 you may be able to remortgage.  This time a loan to value of 75% allows you to raise £112,500 which could provide at least £37,500 of extra capital which could be used as a deposit on additional properties to increase the portfolio.