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How do you get a better interest rate as a portfolio landlord?

Wes Boswell

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Good morning!

My wife and I are very fortunate that we've managed to build up a portfolio of >10 properties over the last several years. Some of the LTV's are now below 65% yet remortgaging still seems expensive! If we had less that 10 properties, it seems we would be able to get rates of circa 1.9%, however having more than 10 means we're always looking at specialist lenders such as Paragon with rates of >3.5%. This seems expensive in the current climate for a mortgage of <65% LTV.

We do use a broker, however does anybody have any experience of consolidating or approaching different lenders to get around this? 

Thanks in advance for any advice.


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Supply and demand unfortunately. Unless your broker has limited lenders (easy way to tell is ask them which they cant access. Very few have access to every lender, theres always a few you cant. If the list is short, thats good and they will relay them quickly. If they need to think about it then that list is perhaps a bit longer and they are quite limited) we are faced with the same problem.

There are a few options, but price is always going to be proportionate to complexity, and thats the paradox. When people ask me "can i finance this?" The answer is always yes. The real question should be "can you finance this in a way that leaves me a margin?" and of course thats often a no depending on the client.

Kensington for instance will only count the properties inside a limited company for portfolio purposes. So a new limited company for properties 11+ could make sense, but you are stuck with Kensington and maybe a couple of others, but then they are going to be 3.5% - 4% plus...

The other thing you have to consider is that sub 2% rates on mortgages are not normal, those lenders dont make a penny on your business and are simply trying to maintain market share until such a time as they can raise rates. Now rates are rising, i really dont expect them to drop again.

If you were selling a product at cost as a loss leader, and demand started to outstrip supply, you would increase price until they balanced. I dont think a lenders concern over risk is going to bounce back quickly, the economic recovery is going to be long and slow and the real pain is yet to come. As such i think lenders are going to hold on rates if they absolutely can. If everyone is expensive, where else are you going to go? Im not an economist and i didnt predict the past 10 years particularly well either, so take that with a pinch of salt.

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker & BTL Specialist

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

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