Case Study: £375k BTL Remortgage Helps Landlord Fund Portfolio Refurbishments

An experienced landlord approached Aria Finance looking to remortgage an existing buy-to-let property and raise additional capital to fund refurbishment works across other properties within his portfolio. With adverse credit in the background and the client being a higher-rate taxpayer at a time when rates were increasing, the case required a lender able to take a flexible approach to affordability.

Case Summary:

• £375,000 buy-to-let mortgage at 75% LTV

• £500,000 property value

• 25-year term

•  Experienced landlord with an established property portfolio 

•  Adverse credit, including historic mortgage arrears 

• Capital raising to fund refurbishment works on other properties

• Completed within nine weeks of application

The Client:

The client was an experienced landlord with an established property portfolio. He owned the semi-detached property subject to the mortgage alongside other investment properties and wanted to use the remortgage to release capital for further investment in his portfolio.

The Situation:

The client needed to remortgage his existing buy-to-let mortgage and raise additional funds to carry out refurbishment works on other properties. However, the application presented a number of challenges.

There was adverse credit in the background, including mortgage arrears, while the client was also a higher-rate taxpayer. With interest rates increasing, affordability was an important consideration, as lenders can apply different stress testing requirements to higher-rate taxpayers.

The challenge was therefore to find a buy-to-let lender that was comfortable with the client's credit history while also assessing the rental income and affordability on a basis that supported the required borrowing.

Our Solution

Aria reviewed the client's circumstances and identified a lender that was prepared to consider the adverse credit and apply a more favourable affordability stress for a higher-rate taxpayer.

The lender assessed the rental income at 125%, compared with the 140% to 145% stress applied by some other lenders. This provided the additional affordability required to support the £375,000 mortgage at 75% LTV.

Aria managed the application closely from initial submission through to completion, maintaining clear communication with both the client and lender throughout. By working at speed and keeping all parties updated, the case progressed efficiently despite the additional complexities involved.

Benefits & Results:

The client secured a £375,000 buy-to-let mortgage over 25 years at 75% LTV, allowing him to remortgage the property and release capital for refurbishment works across his wider portfolio.

Despite the adverse credit history and affordability considerations associated with being a higher-rate taxpayer, Aria identified a suitable lender and successfully navigated the application through to completion within nine weeks.

The successful remortgage gave the client access to the capital required to continue investing in and improving his property portfolio, while providing a mortgage structure aligned with his longer-term investment plans.

Following completion, the client said: “Just got confirmation we completed today, all done now. Finally got there in the end. Thank you for your hard work and your amazing support, really appreciate it.”