As a niche mortgage specialist, we are often asked about buy to let mortgages and early repayment charges. Typical questions include:
There are many reasons borrowers want access to a no ERC buy to let mortgage. These include:
In general, these are the criteria you will need to meet in order to secure a buy to let mortgage with no early repayment fees.
The following example is based on a purchase price of £175,000 with an interest-only mortgage of £131,250 over 25 years.
Initial rate: 3.80% (APR 5.4%)
Valuation fee: free
Arrangement fee: £1,312.50
Admin fee: £150
The mortgage repayments start at £415.63 per month for two years. After this time, the mortgage reverts to the lender’s variable rate.
In addition to these charges, there is a funds release telegraphic transfer fee of £50. There are no early repayment charges. On full redemption, there will be a funds release fee of £90 and a sealing fee of £150.
Initial rate: 4.05% (APR 4.2%)
Valuation fee: Free
Arrangement fee: £749
Booking fee: £250
The mortgage repayments would start at £442.97 per month and remain the same for the lifetime of the mortgage.
In addition to these charges, there could be a telegraphic transfer fee of £20. There are no early repayment charges. Once paid in full, there is simply a mortgage discharge fee of £125.
There isn’t much competition between lenders for this type of mortgage simply because lenders want long-term customers. There isn’t much interest in short-term relationships, so you may find that rates and fees are higher than with other mortgages.
Making your capital work for you is a trick that requires experience and expertise. We have access to a range of mortgage brokers who can help you to make your investments work harder. If you’re looking to secure a buy to let mortgage with no early repayment fees, our team can help to connect you with the right brokers. Get in touch or explore our buy to let guides to find out more.