Small BTL mortgage

[Toilet Duck]

Morning all,

I have a BTL property and the existing mortgage deal expires in a few months. I have roughly £30k left on it. I'd like to pay off £20k and remortgage a reduced balance of £10k over one or two years. Going on the usual comparison sites, it seems that £10k is too "small" an amount to mortgage. Are there any lenders that will allow a BTL mortgage of £10k?

Many thanks in advance for any pointers

[Ziplobb]

I think you will struggle due to the processing costs etc for the lender. What about a personal loan ? higher rate but on £10k its not worth messing about with and you have not got the upfront fees to contend with"

[interstellar]

I would personal loan it at 5.9%

Do it over 5 years if the payment level is an issue and overpay if you can?

Edited by interstellar on Sunday 10th September 11:20

[BoRED S2upid]

As above really personal loan or mortgage what they will allow £15k? £20k? Handy to have a mortgage over a loan if you want access to the money in the future.

[33q]

Credit card cash advance and keep rolling it over. Some CC companies do loans at reasonable rates and repayments can be very flexible.


I've done this since I paid my property mortgage off in 2019. Rates are a bit higher a the moment but I've had some really cheap deals on new cards.

[1878]

Remortgage the 30k then make a 20k over-payment later?

[Sarnie]

1878 said:

Remortgage the 30k then make a 20k over-payment later?

^This...

[Toilet Duck]

Cheers all, I'll look into a personal loan, that makes a lot of sense!

Sarnie said:

1878 said:

Remortgage the 30k then make a 20k over-payment later?

^This...

I've been overpaying this BTL mortgage since the day I took it out. Across a number of different lenders it seems they only allow you to pay back 10% of the outstanding balance each year. If I remortgage the full £30K then I won't be able to overpay £20K as that far exceeds their limit. Unless I'm not understanding correctly what you're suggesting? I don't want to pay any more in interest than I have to.

Unless there's a better way, I think I'll just take out a two year personal loan of £10K, pay off the £30K mortgage, and then pay off the personal loan in full early after around 12 months.

Cheers

[Sarnie]

Toilet Duck said:

I've been overpaying this BTL mortgage since the day I took it out. Across a number of different lenders it seems they only allow you to pay back 10% of the outstanding balance each year. If I remortgage the full £30K then I won't be able to overpay £20K as that far exceeds their limit. Unless I'm not understanding correctly what you're suggesting? I don't want to pay any more in interest than I have to.

Unless there's a better way, I think I'll just take out a two year personal loan of £10K, pay off the £30K mortgage, and then pay off the personal loan in full early after around 12 months.

Cheers

The 10% isn't a hard limit, it's just the amount you can pay before they charge you the ERC...........but you'd just take an ERC product or even a product with an ERC would be low given the size of the balance, as it's a percentage of the balance......

[r44flyer]

There will be some lenders that don't limit you to 10% overpayments. A SVR won't usually have a limit, AFAIK. But obviously the rate will be higher.

[Dingu]

Why not just continue on SVR and overpay £20k once your current fixed term ends? Then you’ll have a £10k mortgage.

[Toilet Duck]

Boo-urns said:

Dingu said:

Why not just continue on SVR and overpay £20k once your current fixed term ends? Then you’ll have a £10k mortgage.

This. It's such a small mortgage the interest rate is largely irrelevant.

You're then free to overpay/repay as much as you like. Far simpler than messing around with a loan or remortgage.

Forgive my ignorance, but are you saying once my 2 year fixed "deal" runs out and reverts to whatever the standard variable rate is, I will no longer be subject to an overpayment cap? So I can overpay whatever I like each month free from penalty? If that's the case, when my existing deal expires I can just whack in a £20k overpayment straight away and knock the outstanding balance down to £10k?

Cheers

[Caddyshack]

Toilet Duck said:

Boo-urns said:

Dingu said:

Why not just continue on SVR and overpay £20k once your current fixed term ends? Then you’ll have a £10k mortgage.

This. It's such a small mortgage the interest rate is largely irrelevant.

You're then free to overpay/repay as much as you like. Far simpler than messing around with a loan or remortgage.

Forgive my ignorance, but are you saying once my 2 year fixed "deal" runs out and reverts to whatever the standard variable rate is, I will no longer be subject to an overpayment cap? So I can overpay whatever I like each month free from penalty? If that's the case, when my existing deal expires I can just whack in a £20k overpayment straight away and knock the outstanding balance down to £10k?

Cheers

Yes, that is correct. The SVR will be high but it won’t make a massive difference on 10k left.


One reply posted suggested an svr product, it is actually hard to remortgage to an svr now, you normally have to drop on to them at the end of a fixed deal.

Coventry / Godiva often do penalty free btl deals on good rates but be wary of the arrangement fees. You could take a remortgage at their min..even if 50k and just repay on day 1.