Product Transfer v’s Re Mortgage For Higher Rate Tax Payer? By Chris Morgan
I’ve been advising Mortgage Clients for 30 years and these are the highest Mortgage Interest Rates the UK have seen for decade. Add to this the highest Fixed Rates and Highest Rental Income Reversion Rates – suddenly Higher Rate Tax Payers are having to make some really tough decisions when their fixed rates come to an end.
With Interest rates forecast by most leading commentators and economists to remain “moderately high” for some time, many Buy To Let Mortgage lenders are very much taking this opportunity to rebuild their balance sheets following last Octobers economic correction. In my opinion they will continue to do so. The problem for fixed rate mortgage holders is that their deals will come to an end and they will have to make a decision or face extremely high variable rates.
Buy To Let lenders will continue to charge inflated rates and product fees on their products for a while yet – so many Buy To Let borrowers are turning to mortgage brokers for advice. What was very much a business as “usual” mortgage situation in the past, has very much become an “Unusual Mortgage” situation.
So, what options do you have when your fixed rate comes to an end?
Stay on Standard Variable Rate
I’ve never seen Buy To Let Standard Variable Rates so high and it’s become so concerning that I’m returning to all of my Buy To Let clients to absolutely make sure they are aware of the situation and have diarised the exact moment they should be taking action, ahead of their products ending.
If you need advice from a Mortgage Adviser, do so early rather than late because in the next year there are especially high numbers of lower fixed rates coming to an end. The higher interest rates are going to make a huge difference to Buy To Let landlords throughout this next period of time.
Re Mortgage To Another Lender
There will be lots of re mortgage packages being offered by lenders with incentives such as free valuations and legal fees – the ones offering the best Fixed Rate products, are likely to charge a particularly large arrangement fee. One client we advised recently would have been charged £15,600 for moving her £560,000 loan, which of course we advised her against proceeding with.
We are currently running market comparisons for all of our existing Buy To Let clients, diarising their fixed rate products and creating strategies for managing their portfolios going forward. Simply the games has changed and we are protecting our clients interest’s, in what we believe will be a high to moderately high interest rate environment for several years to come.
Utilise Product Transfer
Within our research for clients we are also assessing the fairness and suitability of any products that their existing lenders are offering their mortgage holders. One of the big changes we have noticed recently is that some lenders are offering “bespoke” products to individual clients and have stopped publishing their existing customer rates on a more generalised basis.
We are providing advice for our clients in this situation and comparing what they have been offered with the general market. If you are concerned about any products you have been offered, or would like our help assessing if the deals you are being offered by your lender fair, then give us a call. We always have access to the latest research. data, commentary and relevant dates on this subject matter.
15 Minute Mortgage Assessment
Unusual Mortgages offer a free “Interest Rate” assessment over the phone for anyone that needs advice on their Fixed or Discounted Mortgage products that are ending. We will be able to assess your options and assist in developing a strategy for what is likely to be the new world for interest rates in the foreseeable future- especially for our Buy To Let clients.
If you require more information on Buy To Let Mortgages, Complex Mortgages, Commercial Mortgages, Expatriate Mortgages, Foreign Currency Mortgages, Large Value Mortgages. Marquee Property Mortgages, Multiple Mortgages, Product Transfers, Re Mortgages, Split Use Mortgages, Split Title Mortgages, Portfolio Landlords you can contact Unusual Mortgages on UK 0845 474 3075 or International +44 1404 45397, email at enquiries@unusualmortgages.co.uk