Do you have a portfolio of buy to let properties with a number of mortgages and lots of administration? A multiple property mortgage may be able to help!
As a landlord's portfolio grows, it's likely that the number of mortgages and administration that comes with each investment grows as well. If keeping on top of your mortgages is becoming a hassle, a multiple property mortgage may be able to help...
What is a multiple property mortgage?
A multiple property mortgage (otherwise known as a portfolio mortgage), is a single, first charge mortgage, secured against more than one buy to let property. Not to be confused with portfolio landlords, mortgages for portfolio landlords, or indeed multiple mortgages secured against multiple properties!
Buy to let, multiple property mortgages are traditionally offered by commercial lenders, rather than your typical buy to let lender. Historically, these types of mortgage were arranged on a sub 60% loan to value (LTV) basis and normally available for loans of over £500k. However, with challenger banks coming into this space, multiple property mortgages can now be taken at up to 75% LTV with a minimum loan of £100k.
How do multiple property mortgages differ to standard mortgages?
So what's the benefit of having more than one property under one mortgage? Well, there are a number of advantages...
- One single mortgage payment so easier from an administration perspective
- Lower lender legal costs
- The properties are viewed in aggregate (so, if one wouldn’t pass a rental calculation, but the others have a surplus, they would balance out.)
- One product expiry date to keep track of
- One single remortgage
- Some may have a drawdown facility included
But as with everything, there are also downsides to take into consideration when reviewing if a multiple property mortgage is right for your portfolio...
- They tend to have a more expensive rate than individual mortgages
- Your flexibility on sale of properties may be restrictive (i.e., you have to pay back the full sale proceeds, rather than a %)
- The mortgage term may be shorter
- Some lenders cap the LTVs
- They generally have higher minimum loan amounts
I've got a portfolio, but I don't know whether a multiple property loan is right for me... where do I start?!
As a landlord, getting your finance right is key to maximising the yield from your property, so I would strongly recommend speaking to an experienced mortgage broker to help you assess whether a multiple property loan is right for your portfolio. When a client approaches us for a loan for their portfolio, we will present them with two options, one for a multiple property mortgage and one option with all the individual mortgage costings, and talk them through the pros and cons for each option. Once we have explained the details of each option, our clients have all the information they need to make the best financial decision for their individual portfolio.
Get in touch
Whether you are an experienced portfolio landlord, or just starting out, you can call me directly on 01732 471 647 or email firstname.lastname@example.org to find out whether a multiple property mortgage is right for your portfolio.
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