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Buy-to-let mortgages and product transfers

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 12. October 2022

Looking to speak to mortgage brokers about buy-to-let mortgages and product transfers. 

  1. Do buy-to-let lenders offer product transfers? If not, why not?
  2. If landlords coming to the end of their can't do a product transfer, what are their options? What would you recommend?
  3. What impact will not being able to do a product transfer have on landlords and the BTL sector? 

3 responses from the Newspage community

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Craig Fish
Director at Lodestone Mortgages
Most lenders that operate in the Buy to Let market do allow product transfers, just as in the residential arena. If by chance a landlord finds themselves with a lender that won't offer them a transfer (though this is highly unlikely), then I fear that there options are limited. Although not impossible, and likely to be very case specific, many landlords are going to suddenly find that the rental income is no longer sufficient to make the mortgage work. If lenders were to stop offering product transfers to landlords, I fear that there will be a mass influx of properties onto teh market as landlords quit. This will have untold consequences on the housiing market.
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Michael Webb
Managing Director at Mortgage Republic
Buy to let product transfers do exist in the market place, but not all lenders offer them, and some lenders do not offer them to every client. The reason behind this is usually how the mortgage was funded by the bank originally. If the bank has funded the mortgage from it's own savings book, then typically they can do a product transfer. Common with lenders like Paragon and Kent Reliance [One Savings bank], the mortgage works [Nationwide BS] and BM Solutions [Lloyds Banking Group]. Where the mortgage was funded on the commercial markets then typically a product switch is not available. A mortgage broker will be able to advise on application if the lender is one who currently considers product switches. If a landlord is not offered a product switch, then of course the remortgage market is open to them. A good broker will be assessing both of these options for their clients anyway. However, rental calculations and stress testing, as well as potential value decreases may prove challenging when remortgaging, and as such a reversion to the standard variable rate may occur.
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Robert Payne
Director at Langley House Mortgages
Buy to let lenders are not regulated like residential lenders and therefore do not have to offer product transfers to their existing borrowers. Some still do but those that don't could be leaving people in a difficult position. Recently we had a client who was unable to do a product transfer and also unable to remortgage to a new lender due to the nature of the property, leaving him with no option but to go onto the expensive standard variable rate or sell the property.