BTL Mortgage - 5% above BOE base rate

[Casa1862]

I've in the later stages of getting a BTL mortgage, they are just waiting for some final paperwork and should be approved.

I'm getting a reasonable fixed rate for 5 years 4.09% with Platform Home Loans , however I'm getting more concerned about what happens when I come off this fixed rate in 2020, it reverts to 5% above BOE rate. I was told this is quite normal with BTL and I would be re mortgaging anyway by then which I kind of agreed with at the time but did think it was high. Problem could be if house prices drop I'll be below my 75% LTV and hence re mortgaging could be difficult and say base rates are 3% I could be stuck with 8% rates, at that rate all my rental income would go to cover the interest payment.

Now, I know I should be asking my broker but he's been pretty useless so far so I though I'd ask here first, so

Is 5% above BOE base common for BLT at 25% LTV? Is this the standard rate for Platform?
If I ask to change now would it mean a new application from scratch, credit check again etc?
Would it mean a new application fee and could I be left without an offer?

Thanks

[Sarnie]

"Now, I know I should be asking my broker but he's been pretty useless so far"

Hopefully I'm not your Broker!!

5% above base to give a pay rate of 5.5% currently is pretty standard really for a BTL.

There are actually some mainstream residential lenders who have higher SVR's (circa 5.99%) currently so 5.5% isn't overly expensive as a BTL SVR.

[Casa1862]

Thanks, it just seems high when compared to my residential mortgage which has a SRV of 4.75%

I was concerned that 5% above the base is fine for now but if base rate go up, which they will then could get expensive. I suppose the lenders now which have SRV at say 5% would be whacking them up anyway. Lets see what happens in 5 years, hopefully there will be some rise if not I'll have to start paying the capital down...crystal ball stuff

[Sarnie]

Casa1862 said:

Thanks, it just seems high when compared to my residential mortgage which has a SRV of 4.75%

I was concerned that 5% above the base is fine for now but if base rate go up, which they will then could get expensive. I suppose the lenders now which have SRV at say 5% would be whacking them up anyway. Lets see what happens in 5 years, hopefully there will be some rise if not I'll have to start paying the capital down...crystal ball stuff

It's always going to seem high when compared to a residential SVR but as I said, there are residential lenders with SVR's at 5.99%......so it's not THAT bad.

Of course, if the base rate goes up to 3% your rate will go to 8.5% but the rest of the market will have moved too......

[Mr Noble]

Coventry BS' BLT arm are currently doing 2.05% over for the entire term of the mortgage. Admittedly only at 65% LTV though.

Cracking deal.

Also note that most of the BTL deals around today are using the mortgage company's "base rate" NOT the Bank of England's base rate. Two very different things.

[Mr Noble]

forgot to add this

http://www.coventrybuildingsociety.co.uk/intermedi...

[Casa1862]

Mr Noble said:

Coventry BS' BLT arm are currently doing 2.05% over for the entire term of the mortgage. Admittedly only at 65% LTV though.

Cracking deal.

Also note that most of the BTL deals around today are using the mortgage company's "base rate" NOT the Bank of England's base rate. Two very different things.

That is a great deal, no tie in and leave if things start heating up. Problem is I've not got 65%lltv otherwise I'd take that even with the £1700 product fee.

I've checked platform and they are 5% above boe rate, not sure it makes much difference as if rates boe rates go up so will leaders using their own Srv.

[iDrive]

Times change - we have a BTL through Woolwich (Barclays), taken out in 2009 at BBR + 0.95 - its clearly very good compared to what is available now