Remortgaging is BACK full of deals for Landlords with some cashback incentives. Mortgage Advisor, Stephen Kerrigan brings you the latest news on Buy-to-Let Mortgages in Doncaster and around the Yorkshire Region.
A brand-new buy-to-let Remortgaging deal now comes with cashback, but is the promise of ‘free’ money too good to resist? This Exclusive Mortgages Remortgages research shows that Mortgage Lenders are increasingly looking to bring in investors when they refinance their portfolios, with some deals and extra bonuses of up to £1,000.
Stephen Kerrigan, the Mortgage Advisor of Mortgages Remortgages Doncaster explains about the heated competition on Mortgage rates that has led to a cashback boom, and he offers advice on whether you should be tempted by these seemingly lucrative incentives.
At the start of 2019, a quarter of fixed-rate mortgages came with some form of cashback. Now, it’s just under a third of deals. and most significantly, the percentage of Remortgaging deals offering a cash bonus has increased by the same margin in the space of just 10 months.
The chart below shows how these incentives have become more common in the buy-to-let market.
What is the Banks Offering?
This varies from lender to lender. Currently, the smallest incentive is £250 and the most generous is £1,000.
The three most common cashback amounts are £250, £300 and £500.
Are they any cheap deals?
At 60% loan-to-value (LTV), four of the 10 cheapest two-year fixed-rate deals come with cashback. This figure rises to eight out of 10 on Remortgaging deals. At 75% LTV, none of the top-10 deals for buyers have incentives, while just two of the top-10 Remortgaging deals do so.
The incentives on offer range from £250 to £500. However, it’s worth keeping in mind these bonuses are dwarfed by the upfront fees on all of these mortgages, which range from £1,295 to £1,995.
Five-year fixes have become much more popular over the past couple of years, and they now make up 46% of all buy-to-let deals. However, with more borrowers looking for long-term rate security, this is now the main battleground for lenders looking to offer the best rates. At 60% LTV, seven of the 10 cheapest deals come with cashback of between £400 to £500 for buyers, while eight out of 10 do so for Remortgages.
No More Fee Free Mortgages?
So, as mentioned previously, up-front fees on the cheapest deals can be very high, but it makes sense however to take a look at the best deals for Fee-Free. Unfortunately, a percentage of Mortgage Advisors without an up-front fee hasn’t risen very much in 2019 – although, Mortgages Remortgages is the place you need to be for any Fee Free Mortgage Advisors in Doncaster.
A fifth (21%) of buy-to-let mortgages are available with no up-front fees, only marginally up on the 20% recorded at the start of this year. However, when we look at the top deals at different LTVs, none of them are available fee-free.
Fee-free deals are very expensive for lenders, especially when so many banks are battling for business. Instead of reducing fees, lenders are instead cutting rates on their buy-to-let deals. Since the start of the year, the average rate on a buy-to-let fix has fallen by 0.15%, as shown by previous Mortgage deals. It’s been a similar story when we look at the cheapest mortgage rates available, as well.
As you can see above, the top rates have fallen across the board, with five-year fixes at 75% LTV dropping by a third of a percent so far this year. There’s also plenty of choice for borrowers in this space – just 0.05% separates the top 10 75% deals.
The promise of extra cash in your pocket is certainly attractive, but in truth, cashback is a bit of a red herring when comparing mortgage deals. After all, there’s a limited benefit to getting £300 cash back when you’re paying an upfront fee of £1,995 to set up the mortgage.
With this in mind, consider cashback incentives as a ‘nice to have’, rather than a deal-breaker. Instead, focus more closely on the quality of the lender, the initial rate, and any up-front fees and early repayment charges (the latter is especially significant if you’re taking out a five-year fix). If you do choose a cashback deal, be aware that you might have to wait until a few weeks to get the payment, with lenders generally paying cashback out within 14 to 28 days of the mortgage start date.
Using a Mortgage Advisor to find the best deal
Finding the right Mortgage can be a complicated business, and it’s getting more difficult to separate the deals from the duds. Our research shows that the number of buy-to-let mortgages on the market has increased by 9% so far this year. The majority of buy-to-let mortgages aren’t available directly to customers, so approaching a whole-of-market mortgage broker could help you get a better rate.
Of the 2,452 mortgages currently on the market, only a fifth (21%) are available directly, while three-fifths (64%) are only available through Mortgage Advisers in Doncaster. Some deals are only on offer to select panels of intermediaries, so ensure that your chosen Mortgage Adviser has access to the full property market.
Mortgage Advisor Questions
Before taking out a buy-to-let mortgage, you should spend some time acquainting yourself with the specifics of how these deals work, as they’re very different to normal residential loans. To learn more about the rules and regulations, how to borrow as a limited company, and what to do if you’ve become an accidental landlord, check out our full buy-to-let mortgage guide.
Take a look at what people are asking…
How do you charge for your services? Mortgage Advisors will either charge the borrower a fee, work on a commission basis (meaning you won’t be charged, but the broker will receive a cut from your Lender), or a combination of the two. However, some Mortgage Advisors have their own special terms such as, Mortgages Remortgages in Doncaster – we have a Fee Free Mortgage Advice from Stephen Kerrigan himself.
Which types of Mortgages is there? When you take out a Mortgage the person getting the mortgage must choose how they’re going to repay it. With repayment mortgages, you can pay for both Mortgage interest and some of the loan itself each month – until the term end. To find out more, read our blog: Remortgaging Advice