How does a BTL product transfer compare to a remortgage? – Stanton

Compared to residential, that choice has not always been so straightforward in buy to let (BTL), given the availability of PTs among different lenders and certain property types. In specialist BTL in particular, it’s no secret that offering PTs can be a more complex proposition and harder to come by.

However, with options now opening up, such as with our own launch of PTs, the choice is growing for landlords looking to refinance. As a result, it’s important for brokers to be aware of both options and the differences to provide the best route forward when advising clients. Just as important is knowing where PT opportunities exist, not just for current clients, but with new cases to protect that long-term relationship and ensure the choice and capability is there at the end of the fixed term.

Product choice

One of the biggest advantages of remortgaging is not being limited to the existing lender’s product range. Instead, a landlord can head back out into the market and explore all their options with the help of an adviser.

While lenders aim to keep PT rates competitive and can sometimes make them better than new customer rates, there is always the possibility that a better deal can be found elsewhere.

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Speed

However, a remortgage cannot really compete with a PT when it comes to speed. PTs are often a preferred choice due to their efficiency. Instead of a full remortgage application, brokers can use the existing case to apply for a PT in a couple of minutes, securing a new deal for clients quickly and efficiently.

In the case of Landbay, we have a fully digital and automated application process within our existing platform, helping to reduce the hassle for all parties and the need for extra paperwork.

Cost

One area where time is saved is in legal work. Unlike a remortgage case, a PT doesn’t require a conveyancer to transfer the mortgage from one lender to another. It goes without saying that eliminating legal fees also creates a real cost saving for the landlord.

Another potential saving is opting for an automated valuation model (AVM), which negates the need for a ‘boots on the ground’ physical valuation. While options vary between lenders and property types, some lenders will offer AVMs on both remortgage and PT cases. Using Landbay as an example, we became one of the first mainstream BTL lenders to integrate AVMs to drive both efficiencies and cost savings.

When it comes to PTs specifically, a landlord can choose an automated valuation, or if the property isn’t suitable or they are not happy with the valuation, they can switch to a physical valuation instead.

Understanding options

PTs are a valuable addition to a broker’s offering, allowing them to provide an efficient, cost-effective and hassle-free way to refinance – supporting the retention strategy of both brokers and lenders. While inherently more complex than a residential mortgage, the same benefits apply for landlords and BTL too. Whether it’s right or not comes down to their individual circumstances and their preferences, and brokers will continue to play a critical role in that decision-making process.

Given the fact that landlords come in different shapes and sizes, with very different needs and requirements, brokers must have a competitive range of options for purchase and refinancing. While options are growing in BTL, not all PT propositions are created equal.

Houses in multiple occupation (HMOs) or multi-unit freehold blocks (MUFBs) have historically been one area not covered by many lenders for PT. It’s therefore important that brokers know what options exist among lenders and are aware of this at the outset, to ensure all avenues are available to their clients when the time comes.

The BTL sector has been one area that has never shied away from innovation – whether that’s through product, criteria or tech itself to improve the broker/borrower experience.

As PTs develop, this will certainly be no exception, and we know, from our perspective, we are already looking at how we can expand this proposition.