Last week’s base rate announcement saw the interest rate drop by 0.25% from 4.75% to 4.5%. Where there are shifting base rates, there are shifting mortgage rates. Where there are shifting mortgage rates, there are a lot of landlords asking: Should I remortgage now or wait?
Getting this decision right can save (or cost) thousands over the long term, so it’s no surprise that property investors lose sleep over it. Remortgaging at the right time can reduce monthly costs, free up equity for future investments, or secure financial stability. But move too soon, or too late, and you could face unnecessary fees or higher rates.
So, how do you know if now is the right time? Let’s break it down.
Why Landlords Are Asking This Question Now
For the first half of 2024 the base rate was stagnant at 5.25% but then we saw two incremental decreases in August and November causing speculation that this was the beginning of a downward trend. With last week’s announcement bringing the rate down further from 4.75% to 4.5% it’s starting to feel like we may see more significant reductions over the year. For landlords on tracker mortgages or those coming towards the end of fixed-rate deals, it feels like a significant time to review the available options.
The Challenges of Re-mortgaging in a Changing Market
With the base rate shifting, there are lots of considerations to be made and various challenges facing any property investor or home owner holding a mortgage right now.
- Fixed-rate deals ending. Many landlords locked in low rates a few years ago and now face higher renewal rates.
- Interest rate uncertainty. Should you fix now, or will rates drop in the near future?
- Portfolio strategy shifts. Some landlords are selling, while others are reinvesting and need to release equity.
- Tighter lending rules. Lenders are stress-testing affordability at higher rates, making refinancing trickier.
If any of these situations apply to you, it’s worth assessing your options now, no one wants to end up on a high Standard Variable Rate (SVR).
Key Factors to Consider Before Remortgaging
If it’s time to re-mortgage or you want to consider it at this stage, there are some key questions to ask.
1. Where Are Interest Rates Heading?
The Bank of England base rate heavily influences mortgage rates, but if the mortgage lenders are less confident in the trend it may take a while for lower rates to trickle down into available mortgage deals. If rates are expected to fall, you may want to hold off fixing for now. Waiting does come with risks. Rates may not drop as quickly as hoped; Lenders may continue to hedge with higher rates. And you can never rule out that the rates won’t reverse and start increasing again.
2. When Does Your Current Deal End?
If you’re on a low fixed-rate mortgage check when it ends. Many lenders allow remortgaging up to 6 months before your deal ends. If you’re on a high rate currently it means you can get some respite before moving to a lower one. Or if you’re convinced that rates are going to fall you can try a tracker mortgage to continue taking advantage of the falling rates. If you don’t know when your current deal ends you could be moved onto an SVR that’s much higher than any fixed or tracker deal. Using software like PaTMa Property Manager allows you to track mortgages and get notifications when your deals are due to end.
3. What’s Your Loan-to-Value (LTV) Ratio?
Lenders will assess your LTV to decide which rates you qualify for. If your property has increased in value this will result in a lower LTV which will give you access to better mortgage rates. So if house prices are increasing and the base rate is going down it’s a good argument to hold off re-mortgaging to try and hit a lower LTV bracket. While this is generally good advice, as with all things investing, what goes up can come down. If house prices drop before you re-mortgage, you could be pushed into a higher LTV bracket. If you’re on the cusp of a bracket then it may well be worth factoring in which side of the cusp you’re going to fall on before you re-mortgage.
The standard LTV brackets in the UK are: 60%, 70%, 75%, 80%, 85%, 90%, and 95%. So if you’re well below 60% the LTV isn’t going to result in much better deals. You can easily track the LTV and mortgage balance for each of your properties in PaTMa Property Manager for a quick and easy way to keep an eye on your options.
4. Can You Afford Higher Payments?
Before switching from your current mortgage to any other mortgage at all, you should calculate the impact on your monthly cashflow. If you’re going on to a fixed rate, make sure that you will be able to afford the re-payments for the duration of the term. If you’re moving on to a tracker mortgage, stress test the deal by looking at how much it would likely cost you if rates begin to rise again. When you’re stress testing, it’s best to look at your entire portfolio, especially if you have multiple properties. Factor in how the mortgages on your other properties may change. If interest rates rise, can you afford the re-payments on multiple properties if you have tracker mortgages on all of them? As well as calculating how they’ll impact your monthly cash flow, consider how your rental yield and return on investment too otherwise the properties could start costing you money rather than making it.
5. What Are the Fees?
Remember that changing mortgages often comes with fees. If you’re switching it’s worth factoring in the common costs. Early repayment charges may come into play if you exit a fixed deal early. If you’re switching to a different mortgage you may be charged an arrangement fee which usually comes in at £999+ up front. If you use a broker to find the best deals, you may be required to pay fees for their services.
Fixed vs. Tracker: Which One is Right for You?
When it comes to re-mortgaging at a time when the base rate is flexible, fixed vs tracker becomes a really relevant question!
Choosing the right mortgage type depends on your risk tolerance and investment strategy.
| Mortgage Type | Pros | Cons |
|---|---|---|
| Fixed-rate | ✅ Predictable payments ✅ Protection from rate rises |
❌ Higher rates than trackers ❌ Locked in for 2-5 years |
| Tracker | ✅ Lower rates initially ✅ No exit fees (in some cases) |
❌ Risk of rate increases ❌ Payments could become unpredictable |
Example fixed and tracker mortgage Scenarios
Scenario 1: A landlord with 6 months left on a low fixed-rate mortgage
- If rates look set to rise, they may lock in a new fixed deal early.
- If rates are predicted to drop, they might wait before remortgaging or choose a tracker mortgage.
Scenario 2: A landlord coming off a 5-year fix into an SVR
- Their rate could jump from 2% to 6%+, significantly increasing mortgage costs.
- In this case, remortgaging to a lower fixed or tracker rate is likely the best move.
How to Assess If You’ll Actually Save Money by Remortgaging
Before committing to a remortgage, it’s important to assess how a new mortgage will impact your finances. Here’s a three step plan you can follow to make sure you’ve considered everything:
Step 1: Compare your new monthly payments
- Use a mortgage calculator to see how much your new mortgage payments are likely to be. This can help you to factor in LTV, overpayments etc. Check different types of mortgage product i.e. fixed vs tracker to give yourself a few options.
Step 2: Factor in all costs
- Add up early repayment fees, arrangement fees, legal costs etc.
Step 3: Look at the long-term impact
- If rates drop after you fix, will you regret locking in?
- If you choose a tracker, could you afford rising payments if interest rates increase?
👉 PaTMa Property Manager makes it easy to see your current mortgage balance and assess potential refinancing options.
Final Thoughts: Should You Remortgage Now?
There’s no one-size-fits-all answer. It depends on:
- When your current deal ends
- Your long-term property strategy
- Your risk appetite (fixed vs. tracker)
- Your loan-to-value (LTV) position
Key Takeaways on remortgaging
- If your fixed deal is ending soon, start looking at remortgage options now to avoid SVR shock.
- If rates seem likely to drop, a tracker mortgage might offer flexibility.
- Always factor in fees, cash flow impact, and long-term strategy before deciding.
Next Step: Don’t leave your mortgage decisions to chance. Start tracking your mortgages in PaTMa Property Manager to stay ahead of upcoming rate changes and make informed decisions with real data.
