Follow these steps to give yourself the best chance of being accepted:
Figure out how much money you need.
Whether you're doing repairs, buying a house, or something else, it's important to know exactly how much you need. At this point, you may just be guessing, so be honest with yourself and be realistic. It's better to borrow a little more than you need than to have to borrow again later at higher interest rates.
Think about reviewing your whole property portfolio.
Check the equity, the amount of loans you still owe, and the interest rates on all your loans. This will put you in a position to think about all your borrowing options and make sure you choose the one that costs you the least.
Get in touch with a BTL second charge broker.
Talk to a broker who knows everything there is to know about second charge mortgages. A whole-of-market broker, Revolution Brokers will be able to find you the best deal for your situation if you give us full information about your property portfolio and a clear idea of what you want to achieve.
Interest rates in general
Rates change based on how well you match the lender's risk profile. This means that you might get a high rate from one lender or even be turned down, but you might be able to get a good rate from another.
At the time of writing, these are the typical interest rates for this type of loan:
A fixed rate is 9.69%
6.55% for a variable rate
Many borrowers choose to pay only the interest instead of the principal to keep their monthly payments manageable. Whether or not this is the right choice for you will depend on your current situation and plans for the future.
For example, you might prefer an interest-only deal if you plan to:
- Sell the house.
- Fix period on you first charge is coming up for renewal and you will be able to refinance the second charge loan on to you first charge mortgage at a better rate.
- Sell some of the other properties you own to pay back the money you borrowed.
