Residential properties often qualify for lower interest rates when re-mortgaging a portfolio because they are considered lower-risk by lenders and therefore, isolating them from commercial property can be a strategic approach to borrowing.

Residential properties typically offer distinct borrowing advantages over their commercial counterparts. One of the key benefits is the availability of lower interest rates. Residential rates are generally more competitive, reflecting the lower risk associated with these types of properties for lenders.

Furthermore, residential portfolio re-mortgages often come with attractive incentives such as free physical valuations and complimentary legal services. These perks are not only cost-saving but also simplify the re-mortgage process, making it more efficient and less burdensome for portfolio landlords.

Residential portfolio re-mortgages, with commercial lenders tend to offer more flexible options in the re-mortgage process, such as Automated Valuation Methodology (AVM). AVMs provide a digital property valuation, which can significantly reduce upfront costs and accelerate the re-mortgage process for portfolio landlords. However, it’s important to note that while many lenders rely on data from sources like Hometrack for portfolio re-mortgages, not all properties will have sufficient data for an AVM. In such cases, a physical valuation may be required for properties that lack adequate digital comparable.

Occasionally portfolio re-mortgage options for residential properties that do not include valuation and legal fees. Our commitment to reducing the total cost of your re-mortgage during the fixed term remains paramount. We diligently compare the overall costs of competing products, which includes all upfront fees, like product fees, valuation fees, and legal charges to provide you with comprehensive advice on your re-mortgage BTL portfolio. This approach ensures you receive the portfolio landlord best re-mortgage rates and terms tailored to your specific needs.

BTL Portfolio Re-mortgage to Withdraw Money

For landlords looking to unlock equity from their properties, a BTL portfolio re-mortgage offers a strategic way to withdraw money for reinvestment or other financial needs. By re-mortgaging a portfolio, landlords can tap into the increased value of their properties, freeing up cash that can be used to expand their portfolio, renovate existing properties, or cover significant expenses.

Re-mortgage BTL portfolio options are specifically tailored to meet the needs of landlords who manage multiple rental properties. These re-mortgage solutions not only provide the liquidity needed to capitalise on new opportunities but also potentially improve the terms of your existing loans. With lower interest rates typically available for residential properties within a portfolio, the cost savings can be substantial, enhancing your investment’s overall profitability.

GET IN TOUCH 

We strategically separate commercial and semi-commercial properties from residential assets during portfolio refinancing. This tactic is designed to secure the lowest interest rates for the residential components of your portfolio by isolating the commercial elements into their own mortgage facilities. This separation can significantly enhance the financial efficiency of your investments.

For landlords focused on refinancing solely commercial properties, or those who choose to isolate these assets into distinct commercial mortgages, several benefits arise, particularly regarding valuation methods and available options. Achieving optimal investment valuations is a common goal for many borrowers. While some lenders require a portfolio of at least five units to offer such valuations, others may extend this to single-unit properties, though these are rarer and come with additional eligibility requirements.

In our detailed FAQs, we delve into the specifics of securing a Market Value 1 (MV1) investment valuation for your commercial properties. We outline the necessary steps and criteria required to ensure you meet lender qualifications. This guidance is crucial for portfolio landlords aiming to obtain the best re-mortgage rates and optimise the financial performance of their commercial investments.

Portfolio lending for commercial properties, such as hotels, retail chains, and office buildings, securing the right mortgage involves understanding and leveraging investment valuations. At Mortgage Lane, we specialise in providing bespoke mortgage solutions that utilise these valuations to support your investment strategy and financial planning.

Investment Valuations Explained: Investment valuations are critical in the commercial lending arena as they provide an assessment of a property’s worth based not only on its current condition but also on its ability to generate income. This method is particularly pertinent for properties like hotels, which depend heavily on operational success, or office complexes with multiple tenants.

Whether you are re-mortgaging a portfolio or specific parts of your property holdings, our expertise at Mortgage Lane is geared towards providing you with tailored advice and competitive solutions that align with your unique financial objectives.

We provide portfolio commercial mortgage options to the following business sectors:

• Retail Stores – Individual shops or chain stores selling consumer goods.
• Shopping Centres – Complexes housing multiple retail stores and restaurants.
• Office Buildings – Spaces leased or owned by businesses for operational purposes.
• Warehouses – Facilities for storage and distribution of goods.
• Industrial Facilities – Locations for manufacturing, assembling, and processing.
• Hotels – Accommodation services for tourists and travellers.
• Motels – Roadside hotels with easy access for motorists.
• Restaurants – Dining establishments offering food services.
• Cafes – Small eating places offering coffee and snacks.
• Bars and Nightclubs – Entertainment venues serving alcoholic beverages.
• Conference Centres – Facilities for hosting conventions and meetings.
• Banquet Halls – Venues for hosting social gatherings, such as weddings and parties.
• Healthcare Facilities – Hospitals, clinics, and other medical service providers.
• Dental and Medical Offices – Specialist facilities for health professionals.
• Nursing Homes – Residential care facilities for the elderly or disabled.
• Day Care Centres – Facilities for child or adult care during working hours.
• Gyms and Fitness Centres – Locations equipped for physical exercise.
• Spas and Salons – Centres for beauty and personal care services.
• Auto Repair Shops – Service centres for vehicle maintenance and repair.
• Car Dealerships – Venues for selling new or used cars.
• Movie Theatres – Facilities showing films to the public.
• Bowling Alleys – Recreational facilities featuring bowling lanes.
• Arcades – Venues with video games and amusement activities.
• Art Galleries – Spaces for displaying art collections.
• Museums – Institutions for preserving and exhibiting cultural, historical, or scientific artifacts.
• Theatres – Venues for live performances such as plays and concerts.
• Schools – Educational institutions for academic instruction.
• Universities and Colleges – Higher education institutions.
• Libraries – Facilities housing collections of books and resources.
• Parking Garages and Lots – Structured or open spaces designated for vehicle parking.
• Gas Stations – Facilities for refuelling vehicles.
• Mixed-Use Developments – Properties that combine residential, commercial, and sometimes industrial spaces.

GET IN TOUCH 

Semi-commercial properties may qualify for buy-to-let interest rates, particularly when the majority of the asset is residential. However, these properties often do not secure the same rates on portfolio re-mortgages as purely residential properties. In cases where you own semi-commercial assets alongside residential properties under the same ownership structure, it might be advantageous to segregate these assets. By applying for separate semi-commercial mortgages, we can potentially lower the costs associated with the residential portion of your portfolio.

At Mortgage Lane, as a leading portfolio mortgage lender and portfolio lender in the UK, we frequently evaluate whether it’s more cost-effective to consolidate all asset classes under one mortgage or to separate them into distinct facilities. While some portfolio landlords prefer consolidation for the simplicity it offers in the application process, splitting the assets into separate mortgage facilities is often more financially beneficial.

Our approach to portfolio lending UK is tailored to optimise your financial strategy, ensuring that you receive the best possible outcomes for your investment portfolio. Whether you choose to consolidate or separate your assets, our expertise will guide you through each step, maximising your benefits while minimising costs.

When managing a diverse property portfolio that includes semi-commercial assets, it’s often economically advantageous to isolate these properties from residential ones during the re-mortgage process. At Mortgage Lane, we specialise in structuring semi-commercial portfolio re-mortgages that cater specifically to the unique financial dynamics of these properties.

Isolate Commercial from residential

Isolating semi-commercial properties can lead to more favourable lending terms. By separating them from residential assets, we can target lenders who specialise in or offer better rates for semi-commercial lending. This strategic approach not only simplifies the lending process but can also result in more economical terms.

As a leading portfolio re-mortgage lender, we understand that each property type within your portfolio carries its own risks and returns. Our tailored portfolio lending UK solutions ensure that each asset is financed in a way that maximises economic benefits while minimising costs. This often means creating separate lending streams for residential and semi-commercial properties, allowing for more specialised, cost-effective lending solutions.

For mortgages for portfolio landlords, considering the separation of property types can be a crucial step in optimising the financial health of your portfolio. Whether you’re looking to expand, or simply enhance the profitability of your investments, Mortgage Lane is here to provide expert guidance and tailored mortgage solutions.

GET IN TOUCH 

With hedging for portfolio re-mortgages, they are most common with larger facilities which usually include portfolio mortgages. We see this as an option for savvy property investors that look at all options which include fixed rates, swaps or caps, these are usually the three options that you have when hedging your interest rates.

hen securing a portfolio re-mortgage with a bank, you typically have the option to choose between variable interest rates, fixed interest rates, or a combination of both.

For loans with variable interest rates, like those tied to the Base Rate or LIBOR, you might consider hedging products such as interest rate swaps or caps. These financial instruments offer protection against increasing interest rates. Each hedging product has unique features, and we can refer you to a third party company to provide alternative options with a detailed explanation of the associated risks and benefits.

Fixed interest rates, commonly known as Fixed Rate Loans, also carry certain risks. Similar to the previously mentioned hedging products, it is crucial to secure these rates at favourable market conditions.

The hedging process usually starts with your bank presenting various hedging options, including swaps, caps, and Fixed Rate Loans, on a non-advisory basis. You will need to evaluate these options and select the hedging product that best fits your needs. The final step typically involves a live recorded call to lock in your chosen hedge at the current rate or premium.

Mortgage Lane are not able to give advice on hedging, but we may refer you to a suitable specialist that is able to assist you. We recommend you seek advice from relevant professionals when considering interest rate hedging against your portfolio re-mortgage.

GET IN TOUCH

Pros of a Portfolio Loan:

1. Flexibility: Portfolio loans often offer more flexible underwriting standards than traditional mortgages, accommodating unique situations like multiple properties or unconventional income streams.
2. Consolidation: By consolidating multiple properties under one loan, you can streamline management and potentially reduce administrative costs.
3. Potential for Better Terms: Depending on the lender and your relationship, you might secure better terms due to the larger loan amount and consolidated assets.

Cons of a Portfolio Loan:

1. Complexity: Managing a portfolio loan can be more complex than handling individual property loans, especially in terms of accounting and tax implications.
2. Higher Risk: If one property in the portfolio underperforms, it could impact the entire loan’s stability.
3. Potentially Higher Costs: Some portfolio loans might come with higher interest rates or fees compared to individual mortgages due to the increased risk to the lender.

How Does a Portfolio Mortgage Work?

With Mortgage Lane, securing a portfolio mortgage starts by ensuring you receive the best terms available on the market. Our process is streamlined to guide you efficiently from initial inquiry to completion:

1. Agreement in Principle (AIP): We begin with a preliminary assessment to provide an agreement in principle, which outlines what we can offer based on your portfolio’s details.
2. Full Mortgage Application (FMA): If you decide to proceed after the AIP, the next step is a full mortgage application, where more detailed financial information is required.
3. Valuations: We then conduct valuations on all properties within the portfolio to determine their market worth.
4. Full Underwriting: Your portfolio undergoes a comprehensive underwriting process to assess risk and confirm loan terms.
5. Offer and Completion: Once approved, we issue a formal loan offer followed by the loan completion, allowing you to consolidate and manage your properties under one mortgage.

GET IN TOUCH

Yes, refinancing out of a portfolio loan is possible. However, a more cost-effective option often is to perform a product switch, known as a Product Transfer (PT), with your current lender. A PT allows you to switch to a new mortgage product with the same lender, usually with lower costs and less paperwork than a full refinance. Opting for a PT can be particularly beneficial if the lender offers favorable terms, underscoring the importance of choosing a portfolio lender that provides flexible refinancing options, including product transfers. This strategy can keep your financial arrangements agile, adapting to your changing investment needs and market conditions.

GET IN TOUCH

Portfolio re-mortgage lenders usually lend up to 80% LTV, however, this can sometimes be up to 85% depending on the lender and the financial landscape at the time.

GET IN TOUCH

Some lenders offering portfolio mortgages and remortgages might have a minimum income requirement of £25,000, however, most do not have a minimum income requirement. So if you are not drawing much out of the portfolio, then there will still be mortgage or remortgage options available to you.

GET IN TOUCH

Traditional portfolio remortgages usually can expect a mortgage offer within 4 weeks of application, however, this does vary amongst borrowers and will depend on the availability of valuers in the specific area of the assets. It is important to provide tenancy agreements, bank statements evidencing rental income and to make valuation payments promptly to maximise the speed of application.

GET IN TOUCH

We arrange cost-effective Portfolio Landlord mortgages for:

• Individuals
• Special Purchase Vehicles/Limited Companies
• Limited Liability Partnerships (LLP)
• Trading companies
• Charities
• On/Offshore Trusts

GET IN TOUCH

We assist our clients with portfolio landlord mortgages in England, Wales, Scotland and Northern Ireland.

GET  IN TOUCH

Yes, some portfolio mortgage lenders provide a 10% overpayment facility annually.

For example, if your principal loan is £125,000, you can make overpayments of up to £12,500 per year without incurring penalties during your fixed term.

However, it’s important to note that many lenders are removing this feature from their products. Therefore, it’s always advisable to check to avoid paying exit fees on repaid amounts.

GET IN TOUCH 

No.

Some lenders impose maximum property limits when approving applications. However, many lenders have numerous conditions when offering mortgages to portfolio landlords.

GET IN TOUCH

GET IN TOUCH

Stress testing on portfolios will vary depending on ownership types and also product choice. For example limited company owners and basic rate tax payers that own their property in personal name, might be stressed as follows for a £100,000 loan with a BTL property earning £550 per month, with an interest rate of 5.2% fixed for 5 years (annual rent / 1.25% / 0.052) = max loan. The calculation would be £6,600 / 1.25 / 0.052 = £101,538 and therefore this example would be affordable for a 75% product.

However, higher rate taxpayers, lending on a 2 year product for the same example might be stressed as follows, where the interest rate in 5.5% for a 2 year fixed £6,600 / 1.45 / 0.075 = £60,689 which is a reduced loan size as stress testing is harsher, both for higher rate tax payers owning in personal name (145% rental coverage) and the stress rate adds a 2% loading to the rate payable, owing to a less generous loan size.

How does stress testing work for LLP owned portfolios?

LLPs are usually stressed based on the individual tax status of each partner, some lenders might blend this also. For example, two borrowers, one partner being a higher rate tax payer and the other a basic rate tax payer, might be blended between 125% and 145% and therefore the rental coverage used in the assessment might be 135%

It is important to consult with your mortgage broker or your bank when re-mortgaging a portfolio owned in an LLP due to specific affordability assessments which vary amongst lenders.

GET IN TOUCH

While portfolio landlords do not always receive better rates automatically, consolidating properties can often lead to more economical solutions by reducing up-front costs. Experienced portfolio landlords typically have access to more competitive mortgage interest rates compared to less experienced borrowers due to their proven track record and lower perceived risk by lenders.

GET IN TOUCH

Sometimes broker fee and legal costs on portfolio re-mortgages can indeed be lower than costs in comparison to using separate mortgages and lenders for each property. This is due to a reduction in product advice, and loan facilities which can make the upfront costs more economical than splitting into separate loans with different lenders.

For Buy to Let Property Portfolio Re-mortgages, rates are currently starting at 5%. This product is suitable for residential buy to lets owned in the same entity.

GET IN TOUCH

Yes you can get both capital repayment and interest only for portfolio mortgages. Most of our clients opt for interest only. It is very common for lenders to approve interest only on portfolio mortgages, including remortgages, this also means that you are only repaying the interest owed on the principle loan amount which will mean that you will owe the full amount borrowed at the end of the term, unless you make any overpayments. If you are borrowing £100,000 at 5.2% then your monthly payments would be £433.33. Lenders usually accept “Sale of security” to be the repayment type of the interest only mortgage, however, most people usually remortgage before the end of the term.

GET IN TOUCH 

It is important to note that portfolio landlord mortgages are not covered by the Financial Services Compensation Scheme, so borrowers should ensure they are dealing with a reputable lender.

GET IN TOUCH 

Concentration refers to the proportion of properties a portfolio landlord holds in a specific location, such as a street or block. High concentration levels can raise concerns for lenders due to potential market impact and risk exposure, this can also be the case for lenders already lending to a large percentage of properties in the same street, or block. Applicants looking to increase that percentage will be starting from the percentage that already exists and therefore they will be able to borrow against properties within the difference of the existing concentration and their maximum exposure.

Lenders vary in their policies regarding property concentration. Some may set strict limits, like allowing no more than 10% ownership in a particular area to mitigate risk. Others might adopt a more flexible stance, without rigid concentration requirements.

GET IN TOUCH

Like residential mortgages, some portfolio landlord mortgage lenders accept applicants with adverse credit histories. Whether you have missed payments, CCJs, defaults, or even an IVA, we can find a suitable portfolio landlord lender for you. If you have been discharged from bankruptcy, your options will improve after three years and even more so after six years.

GET IN TOUCH 

A portfolio landlord mortgage is designed to purchase or re-mortgage a property, whether for Buy to Let or Commercial use.

Financing for portfolio landlords can be more complex, necessitating advice from an expert mortgage professional. For instance, many High Street banks have stricter criteria and often do not lend to applicants owning four or more mortgaged properties. We assist a wide range of investors by accessing an extensive network of High Street and specialist lenders to find the most suitable lender for your needs.

GET IN TOUCH

We provide expert assistance to clients looking to structure their property investments within a limited company or transition from a partnership to an LLP, through our specialist Portfolio Mortgage Lending services. For clients utilising any form of incorporation relief based on tax advice, it is critical to inform your broker as soon as possible. This prompt communication allows us to ensure that potential portfolio lenders are fully aware of and agree with your tax strategy – a crucial factor as it may impact your stamp duty liabilities upon completing the transaction.

Tax considerations are integral to these financial strategies, and we emphatically recommend that all our clients consult with a qualified tax expert before adopting any incorporation relief measures. Such professional advice is vital to fully understand and effectively plan for the tax implications of your investment strategy.

As a prominent player in portfolio lending UK, Mortgage Lane is dedicated to offering customised mortgages for portfolio landlords. Our services are designed to meet your specific financial and legal needs, facilitating a seamless transition and ensuring optimised financial outcomes for your property portfolio.

GET IN TOUCH