46% of Portfolio Landlords Plan to Refinance, Averaging Nearly Four Mortgages Each

Almost half of landlords with four or more buy-to-let mortgages intend to refinance within the next 12 months, with those planning to do so expecting to cover an average of 3.7 loans each.

The finding, from Pegasus Insight’s latest Landlord Trends research, points to a substantial series of mortgage decisions across existing portfolios. The significance is the number of facilities involved: for many intending borrowers, the coming review extends well beyond one property reaching the end of a fixed rate.

Mortgage Solutions and Property Reporter reported on 11 November that 46% of the portfolio group planned to refinance at least one mortgage. Across all surveyed landlords with buy-to-let borrowing, 38% expected to remortgage or arrange a product transfer, averaging 2.9 mortgages among those intending to refinance.

A refinancing pipeline, not a forecast of new investment

The research records intentions rather than completed lending. It does not establish how many mortgages will ultimately move to another lender, how much additional capital will be raised or how many new properties will be bought.

The 3.7 average also needs to be read precisely. It is the number of mortgages that intending portfolio refinancers expect to refinance, not their average portfolio size and not an average across every portfolio landlord in the survey.

Mortgage Soup’s account of the research confirms the sample and fieldwork dates. These are the findings of one survey of NRLA members, rather than a census of UK landlords. They provide a useful indication of forthcoming borrowing decisions without establishing a national volume of guaranteed business.

Refinancing can sit alongside a decision to reduce a portfolio

Across the wider survey, 44% of landlords intended to reduce their letting activity and only 5% planned to expand. At the same time, 85% reported that their letting activity remained profitable. These percentages describe broader survey findings and should not be relabelled as responses from the refinancing subgroup.

There is no necessary contradiction between those results. A landlord can remain profitable, decide to sell selected properties and still need new mortgage arrangements for the homes being retained. Profitability alone does not show how much cash remains after upcoming expenditure or whether the business still meets the owner’s objectives.

Willow’s assessment is that the refinancing opportunity is therefore wider than acquisition funding. It can involve lowering costs, preserving reserves, funding improvements or aligning the remaining debt with a smaller portfolio. The survey does not reveal how much each of those motives contributes to the total.

Nearly four renewals create one wider cash-flow question

Several mortgages may have different product-end dates, repayment terms, lenders and early repayment charges. Looking only at the next rate to expire can leave the landlord without a clear view of the borrowing costs that will follow later in the year.

A coordinated review starts with the calendar. The end of a fixed or discounted rate should be distinguished from the end of the mortgage term itself. It then places each loan alongside the property’s rent, running costs, planned works and intended holding period.

That does not mean every mortgage should be replaced immediately. A suitable existing deal may be worth retaining until its charges expire. Another property may need an earlier decision because it is being sold, requires additional funding or has a more difficult refinancing position.

Reviewing the portfolio together allows those decisions to be sequenced. It avoids assuming that the same rate type, lender or completion date will be appropriate for every property.

Product transfers belong in the comparison

The survey’s wider borrowing figure expressly includes product transfers as well as remortgages. A product transfer changes the deal with the existing lender; a remortgage typically replaces the borrowing with another lender. They can involve different processes, costs and eligibility requirements.

The Mortgage Works’ switching guidance, for example, allows eligible borrowers to arrange a rate switch ahead of their current deal ending and explains that an early repayment charge may apply to an in-deal switch. Its published process also distinguishes a rate switch from extending the mortgage term, which involves further assessment.

The practical comparison is between the available existing-lender option and suitable alternatives, including the cost of moving. An application that also changes the loan amount, ownership or term should not be treated as a straightforward renewal of the current rate.

Rental coverage can affect more than the next property

A landlord’s assessment of a property’s profitability and a lender’s affordability test answer different questions. Interest cover tests examine whether rent supports borrowing under the lender’s assumptions, which may differ from the interest currently being paid.

NatWest’s published portfolio criteria explain that relevant applications involve assessing aggregate loan-to-value and interest coverage across the portfolio. The same guidance states that its portfolio check is not required for a like-for-like remortgage. That distinction illustrates why the proposed transaction and the lender’s precise policy matter.

For a landlord reviewing several loans, current rents, mortgage balances and property values need to be consistent across the information supplied. A strong property should not be assumed to compensate automatically for a weaker one, and a planned rent increase should not be treated as established income before it can be evidenced and accepted.

The lowest rate may not produce the lowest overall cost

Product fees can become material when several mortgages are being reviewed. A percentage fee applies to the relevant borrowing, so comparing only the advertised rate can miss a substantial part of the expense. Legal costs, valuation charges, early repayment charges and any cashback or included services also belong in the calculation.

The comparison should cover the intended period of ownership and borrowing. A landlord expecting to sell an asset may place greater weight on repayment flexibility than one planning to retain it for many years.

Combining loans into a single facility is another possible structure, but administrative simplicity does not establish a financial saving. Where borrowing is secured across several properties, the terms for releasing an individual property can affect later sales or refinancing.

Equity release and ownership changes need separate decisions

Raising additional money for improvements or an acquisition increases the borrowing that must be supported. The review needs to establish the usable funds after costs, the additional payments and whether the retained properties still leave sufficient reserves for repairs and periods without rent.

Moving an existing personally owned property into a company is also a different transaction from changing its mortgage rate. HMRC’s property-transfer guidance explains that, where Stamp Duty Land Tax applies, a transfer to a company may be assessed on market value. Tax treatment depends on the circumstances, and Scotland and Wales have different property transaction taxes.

Any ownership proposal therefore needs coordinated tax, legal and mortgage advice. A company structure should not be presented as an automatic benefit of refinancing, and the lender’s acceptance of that structure does not establish that it is right for the landlord.

A portfolio finance review starts with the properties being retained

The useful starting information is a property-by-property schedule showing ownership, value, rent, mortgage balance, current payment, product-end date, remaining term and early repayment charges. Planned sales, purchases and works should sit beside that schedule, together with the cash available to carry them out.

Accountants, letting agents and solicitors may hold different parts of this information. Bringing it together allows the finance review to test the landlord’s intended position after the proposed changes, rather than simply replace each mortgage as it expires.

The new research points to a meaningful period of refinancing decisions among portfolio borrowers. Willow can compare existing-lender options and suitable remortgages across those loans, assess rental coverage and capital needs, and manage the selected applications through to completion.