Property Portfolio Mortgages
- Free valuation and free legals
- Up to 75%LTV for re-mortgages
- Up to 90% LTV on BMV purchases
Property Portfolio Mortgages
- Free valuation and free legals
- Up to 75%LTV for re-mortgages
- Up to 90% LTV on BMV purchases
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We work with portfolio mortgage lenders that have free valuation and free legal products, so for borrowers unsure of valuations, this can significantly de-risk applying for a re-mortgage. For borrowers buying a property portfolio using a mortgage, we can also look at lending against the value of the portfolio, rather than just against the purchase price which could be as much as 90% Loan to Purchase Price. Discover the best property portfolio mortgage lenders with Mortgage Lane, whether you are looking for one mortgage for all your properties, or separate mortgages, we will streamline you to the most competitive options on the whole market.
Information gathering and advice
The first process in your portfolio mortgage application will be gathering or updating information in relation to the property, tenants, or yourself. Once this has been established your expert mortgage broker will make a product recommendation, or potentially multiple if more cost effective.
Credit approval
Once you are satisfied with the product recommended and have confirmed to proceed, this will usually be submitted the same day to give you a decision, until this point there is still nothing to pay! As long as the Agreement in Principle (AIP) was approved, we can move to application stage where fees become payable.
Application, valuation & underwrite
Once the application is submitted, your valuation will be paid and depending on the lender, your valuation will be instructed immediately or once your initial underwriting has been completed. Once the valuation is returned, if acceptable, the lender would then look to make a formal offer. You can then move to legal stage.
Offer and completion
Once you have had your portfolio mortgage offer, you will require legal advice, your solicitor can draw down the loan once the legal requirements are satisfied. Your broker at Mortgage Lane will always be checking in on the application post offer, so we are chasing your completion for you too!
Types of Portfolio Mortgages
If you are looking to add properties to your portfolio it is possible to re-mortgage your existing portfolio and purchase the additional properties onto one mortgage facility, however the legal process will be tied together so one could impact the other, reducing the speed of your refinance if the purchase is delayed.
We connect borrowers with the best portfolio mortgage lenders, with the right mortgage products for expanding their property holdings. Our approach involves analysing your portfolio’s overall Loan to Value (LTV) to recommend the most cost effective lending options.
Navigating the complexities of portfolio mortgages demands expert advice, a service we proudly offer. A notable point for property portfolio mortgage borrowers is the stricter lending criteria of many high street banks, which frequently do not lend to applicants with four or more mortgaged properties. This is where our expertise becomes invaluable.
At Mortgage Lane, we cater to a diverse range of investors, leveraging our access to a broad spectrum of lenders, including both high street banks and alternative financing options. Our goal is to find the most suitable lender for your specific requirements, ensuring a smooth and successful expansion of your property portfolio.
A portfolio mortgage consolidates multiple properties onto a single mortgage product, using each asset in the portfolio as security for the loan. This approach is particularly beneficial for clients looking to streamline their debts with one lender, which can lead to significant savings on upfront costs such as legal, broker, and valuation fees and some of these products do not charge up front fees.
Portfolio mortgages are often advantageous for larger loan amounts, where we can negotiate bespoke rates with banks. These tailored solutions not only provide potential savings on initial costs but also may offer discounted product options. Additionally, for portfolio landlords with smaller assets, clustering properties together in a portfolio mortgage can help meet minimum loan size requirements, thereby accessing more favourable lending terms.
There are key factors lenders consider with portfolio mortgages, which might include how they treat a mix of asset classes within the same loan.
Incorporate your portfolio
- Keep your mortgage product
- Don’t pay exit charges
- Free valuation and no legal charges
We assist borrowers looking to transition their property portfolio into a limited company structure, from partnerships to LLPs, or other incorporation forms. When clients opt to use incorporation relief based on tax advice, it’s crucial to inform your broker early in the process. This ensures we can verify with potential lenders that they accept the specific tax methods being used, especially regarding their impact on stamp duty transactions at completion.
We work with portfolio mortgage lenders that will honour your fixed rate when completed in a partnership, allowing you to enter into an LLP or Ltd company without an exit fees whilst retaining your interest rate and mortgage account.
Many property portfolio owners are looking to incorporate their properties into a Limited Company, or Limited Liability Partnership to find a better tax solutions against the Clause 24 changes that impacts buy to let landlords.
Given that tax considerations are a legal aspect of these transactions, we strongly recommend seeking guidance from a tax expert. Professional tax advice is essential before committing to any incorporation relief method, to ensure compliance and optimise financial outcomes. Mortgage Lane is dedicated to guiding clients through this intricate process, aligning financial strategies with legal and tax requirements for a seamless incorporation transition.
We assist property portfolio owners in re-mortgaging existing properties, optimising the process to raise funds for new purchases and to reduce the cost of borrowing on like for like portfolio re-mortgage applications. We focus on finding the best lending solution for your portfolio’s current Loan to Value (LTV) to identify the most financially beneficial re-mortgage options. Recognising the intricacies of portfolio re-mortgaging, we offer specialised guidance to navigate this complex area, this might include:
- Whole portfolio re-mortgage
- Individual mortgages
Sometimes, property portfolio owners where their assets consist of residential buy to lets, it can be efficient to re-mortgage with one lender as they are of all the same asset class. However, occasionally there might be some semi commercial, or commercial properties owned in the same limited company and in those cases it may be more cost effective to isolate those onto another mortgage to avoid increasing the interest rates and borrowing costs on the Buy to Let properties.
When re-mortgaging a portfolio it is key to be aware of the set up costs, which include:
- Product fees if applicable
- Legal fees
- Valuation fees
- Broker fees if applicable (we do not charge broker fees for portfolio re-mortgages)
We deal with fee-free portfolio mortgage lenders, that do not charge product fees, legal fees, or valuation fees and this can considerable reduce your cost of borrowing.
It is key to understand lending factors for portfolio mortgages and how to structure funding against portfolios where there is a mix of asset classes, commercial assets occasionally may be isolated on a separate mortgage facility to reduce your overall cost of borrowing.
Suitable for
- Portfolio landlords with low LTV
- Borrowers buying at auction
- Developers
For property portfolio owners who also engage in property development, accessing additional capital efficiently is crucial. A hunting licence offers a flexible financing solution, allowing them to borrow against their existing portfolio. This arrangement typically involves setting up an offset account, where interest is only charged on the borrowed amount at the start of each month.
This method is particularly cost-effective compared to arranging individual finance for each new purchase, as it significantly reduces setup costs. The hunting licence acts as a revolving credit facility, providing portfolio landlords with rapid access to funds up to 75% Loan to Portfolio Value (LTPV). This quick capital availability is especially beneficial for meeting the tight deadlines often associated with traditional property auctions.
Mortgage Lane assists portfolio landlords in setting up hunting licences, ensuring they have the financial agility to capitalise on new opportunities as they arise, without the burden of repeated setup fees.
It is key to understand lending factors with Property Portfolio Mortgages, especially where we are purchasing a property portfolio. There are generally two options when acquiring a property portfolio:
- Purchasing the properties
- Purchasing the company
Both of the above will have their own stamp duty differences, usually with buying shares in a company being lower in cost.
Purchasing the company
We would recommend applicants buying a company owning a property portfolio to do their due diligence on the company and the properties within the entity they are buying for their own piece of mind, but also to provide those items to a property portfolio mortgage lender, these due diligence requirements might consist of:
- Valuations to evidence the properties are being sold at market value
- Insurance policy and claims history
- Rent book and arrears information
- Share purchase agreement
- Director insolvency checks
- Planning confirmations
- Company credit checks
- Tenancy agreements
- Maintenance history
- Financial accounts
- Asset register
- Tax records
- Licences
PROPERTY PORTFOLIO MORTGAGE CRITERIA
At the start of your property journey your mortgage options are predominantly with high street or tier one lenders. However, as your portfolio grows and you acquire four or more mortgaged buy to let properties, lenders will classify you as a 'portfolio landlord.' At this stage, high street lenders typically impose additional stress tests and criteria on portfolio income and Loan to Value (LTV) ratios on the portfolio itself. This shift often means that your mortgage needs become more complex and better suited to specialist lending. Sometimes a portfolio landlord will require mortgage lenders that have relaxed criteria around portfolio stress testing, LTV limits and minimum incomes. We also assist many of our applicants with portfolio incorporation into a limited company or LLP and in some cases where applicants are using an incorporation relief tax method.PROPERTY PORTFOLIO MORTGAGE TOPICS
- How Portfolio Mortgages Can Transform Property Investment in 2024
- Portfolio mortgages a comprehensive guide
- Lending Factors for Property Portfolio Mortgages
- Property portfolio re-mortgages
- Mortgages for portfolio landlords
- Portfolio landlord mortgage rates
- Buy to let mortgage for portfolio landlord
QUESTIONS ABOUT PORTFOLIO MORTGAGE LENDERS
Property Portfolio mortgage lenders will use the rental income of the securities, which up the portfolio properties you are buying or re-mortgaging.
Often property portfolio borrowers will require specialist mortgage options to maximise borrowing, high street lenders that offer the cheapest rates, are often less suitable for portfolio landlords due to their harsher stress testing of around 145% at a nominal rate of 5.5% where rent roll is over the higher rate tax band.
Specialist lenders are often more relaxed on portfolio stress testing and stress testing on portfolio rent can be seen as low as 100% rental coverage with a stress of 5%
Following the newly issued PRA requirements, each mortgage provider is obliged to assess these types of individual’s portfolios when they own 4 or more “mortgaged” buy to let properties. Whilst there are not precise guidelines which have been issued, each lender has a duty to ensure a portfolio landlord is appropriately evaluated in several different areas including: portfolio rental cover, gearing, as well as their assets, liabilities and cashflow namely via a ‘Business Plan’. We can assist you with how to present business plans that will accurately and positively illustrate your investment experience.
We also assist many applicants looking to incorporate their property portfolio into a limited company, or sometimes from a partnership to an LLP and occasionally. If you are using any form of incorporation relief and you have had tax advice, it will be advised to let your broker know of this early on to confirm with any potential lenders that they approve of that tax method that may also impact your stamp duty transaction on completion. Due to tax being a lawful aspect of this transaction, we always recommend to seek tax advice from a proven expert before committing to an advised incorporation relief tax method.
We work with property portfolio mortgage lenders that do not cap the LTV of your portfolio.
Some property portfolio mortgage lenders have adopted a more cautious approach in their lending practices. This caution often manifests in the form of LTV (Loan to Value) caps for the overall property portfolio. It’s common for some lenders to limit the portfolio’s LTV to between 65-80%. This means that for a new purchase or re-mortgage, these lenders might not approve applications if it results in the portfolio’s LTV exceeding this range upon completion of the transaction.
However, it’s important to note that not all lenders implement these LTV caps. Lending criteria can vary significantly between different financial institutions. If you find that these LTV restrictions are impacting your investment strategy or loan options, Mortgage Lane is here to assist. Our expertise in navigating the complexities of portfolio lending enables us to identify lenders who may offer more flexible LTV ratios, ensuring you find a mortgage solution that aligns with your portfolio’s needs and goals.
Concentration refers to the percentage of properties a borrower owns in a specific area, like a street or block.
Separately, lenders also look at their own concentration of how many loans in a block or a street they are lending on at one time.
High concentration levels can be a concern for lenders due to potential market impact and risk concentration.
Lenders have differing policies on concentration for portfolio landlord mortgages. Some may impose limits, such as a maximum of 10% ownership in a particular area or block, to mitigate risk. Others might be more flexible, lacking strict concentration requirements.
We work with a range of lenders who are comfortable with various levels of concentration in a property portfolio. This flexibility is essential for landlords seeking to expand or consolidate their portfolios in specific areas.
We arrange cost-effective property portfolio mortgages for:
- Individuals
- Special Purchase Vehicles/Limited Companies
- Limited Liability Partnerships (LLP)
- Trading companies
- Charities
- On/Offshore Trusts
It is important to note that property portfolio mortgages are not covered by the Financial Services Compensation Scheme, so borrowers should ensure they are dealing with a reputable lender.
No.
Some lenders may have maximum property limits, when approving applications. However some lenders do have so many conditions when offering mortgages to portfolio landlords.
Whilst some property portfolio mortgage lenders do enforce a minimum income requirement (often £25,000), the majority of lenders do not have a minimum income requirement, as long as some level of an income can be evidenced.
Every lender will have their own individual tailored criteria, which may differentiate slightly.
Due to the extensive level of experience portfolio landlords hold, lenders often do not require a minimum income for these individuals. Whereas there are typically income barriers in place for first time investors to be deemed as eligible.
A property portfolio mortgage is used to purchase or re-mortgage a property when the applicant has 4 or more mortgaged buy to let properties, this can be for Buy to Let, or Commercial use.
Finance for portfolio landlords can be much more specialist and at times a little complex, requiring advice from an expert mortgage professional. A primary example which you may notice, some Highstreet banks typically have much more stringent criteria and do not lend where an applicant will own four or more mortgaged properties. We can assist a multitude of investors, having access to a wide array of High street as well as diverse specialist lenders to locate the most suitable lender for you.
Yes, some lenders offer a 10% overpayment facility, per annum.
This means that if your principal loan was £125,000 then you could repay £12,500 per annum as an overpayment without incurring a penalty within your fixed term.
However, it is important to note that many lenders are stripping this from their product ranges, so it is always worth checking to avoid paying exit fees on amounts repaid.
Just like residential mortgages, there are also property portfolio mortgage lenders that allow for applicants with adverse credit. So whether you have missed payments, CCJs, defaults or even an IVA, we can still source you with a suitable portfolio landlord lender. If you have discharged from bankruptcy then your options will become better after 3 years and also subsequently 6 years.
We assist our clients with property portfolio mortgages in England, Wales, Scotland and Northern Ireland.
Learn more about mortgages with Mortgage Lane
Learn more about complex topics covered in our blog, relevant to property portfolio owners looking for mortgage lending across a multitude of property types and tenant types.
CONTACT US
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- Closed Sat & Sun
- Call us for an appointment or fill in the contact form on this page
- Call: 0333 231 8206
- Email: enquiries@mortgagelane.co.uk
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