Portfolio Landlord Mortgages

There is actually no technical or legal limit to the number of mortgaged Buy-to-Let properties you can own. Any restrictions you might face will be down to your own personal financial circumstances.

However, most lenders will want to minimise their risk exposure. Therefore, they will put a limit on the number of properties they are willing to lend against. It’s also likely they will limit the number of mortgaged properties they want to see in your portfolio as a whole.

For example, a lender will perhaps provide mortgages for a maximum of five properties to any household, rather than individuals, to avoid multiple applications in the name of spouses or other family members. They may then set a maximum limit of ten mortgaged properties in a portfolio, with them and other lenders.

Of course, these limits and other criteria will vary from one lender to the next. If a lender allows more properties they might balance this with requiring more equity, a larger deposit, or by imposing a higher interest rate.

In September 2017, the government introduced more Buy-to-Let regulations. This set out more stringent rules for lending to portfolio landlords.

Lenders are required to run an analysis of the landlord’s whole portfolio as part of the lending process. This is to ensure that they’re not becoming over-committed.

Depending on the lender’s criteria, this analysis might also include a landlord’s other assets. Considerations like the property’s location, the landlord’s experience and other income sources will be looked at.

This is an effort to curb any higher-risk lending. Where banks lose money, landlords lose their business, and people lose their homes.

These regulations have led many lenders to place limits on the number of properties they are willing to lend against with any individual borrower (or their household).

You might want to remortgage one or multiple properties in your portfolio for a number of reasons. Some examples include:

• To utilise the increase in value of the property, to raise capital to invest in another property.
• To finance alterations or improvements to properties in your existing portfolio.
• To consolidate your debts in other areas.
• To simply take advantage of a better interest rate elsewhere.

The reason for remortgaging may have a bearing on how your remortgage application is treated by the lender.

If your aim is to make improvements, then most lenders are happy for you to do so.

If you are looking to use the cash to fund the deposit for a further property, then a lender will need to assess your overall exposure. It will likely cause an issue if you already have five mortgaged properties with them. Or if you have ten across various lenders in your portfolio.

Using a remortgage to consolidate debts can be a sensible decision. This is because the interest charged on a mortgage is usually lower than that for a loan. However, this may not be the case with a mortgage on a Buy-to-Let property. Many lenders may shy away from funding a release of equity for this purpose, as it is deemed a higher risk.

If you’re unsure about your remortgage options, reach out today.