Introduction
We recently helped our customer, an experienced portfolio landlord in their 40s, arrange a buy-to-let remortgage on a purpose-built flat in London to raise additional capital for property improvements.
The customer wanted to release equity from the property while keeping their mortgage payments manageable. However, securing the required borrowing meant finding a lender whose rental affordability calculations could accommodate the loan amount alongside the customer’s existing property portfolio.
After researching specialist buy-to-let lenders and discussing the case directly with lender representatives, we arranged a five-year fixed-rate remortgage with West One Loans.
The new mortgage provided was aproximately £420,000 in total borrowing, including £30,500 of net additional capital for property improvements.
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The Scenario
Our customer was a self-employed company director in their 40s who owned several investment properties.
They were the sole shareholder of an established limited company, receiving income through a combination of salary and dividends. The business had been operating since 2023, with two years of accounts available.
Their annual personal income was in the region of £80,000 to £100,000 or more. They also had existing buy-to-let mortgages and personal loan commitments.
The customer wanted to remortgage a purpose-built flat in London, valued at £650,000, to release funds for improvements across their property portfolio.
Mortgage Details
| Detail | Information |
| Location | London, Greater London |
| Property type | Purpose-built flat |
| Property valuation | £650,000 |
| New mortgage amount | Around £420,000 |
| Net additional capital raised | £30,500 |
| Equity remaining | £227,500 |
| Loan-to-value (LTV) | 65% |
| Mortgage term | 25 years |
| Repayment method | Interest-only |
| Lender | West One Loans |
| Mortgage product | 5-year fixed-rate buy-to-let remortgage |
| Purpose of capital raising | Property improvements |
The customer preferred an interest-only mortgage to keep their ongoing payments within budget.
They also wanted a five-year fixed rate to provide longer-term payment stability and preferred to add the mortgage arrangement fees to the loan rather than pay them upfront.
The Challenge
The main challenge was securing the full borrowing amount while satisfying the lender’s rental affordability requirements and portfolio landlord criteria.
Although the property had substantial equity, this alone did not determine how much the customer could borrow.
Meeting Buy-to-Let Rental Stress Tests
Buy-to-let lenders assess whether the rental income is sufficient to support the proposed mortgage using an interest coverage ratio (ICR).
This calculation compares rental income against a stressed mortgage interest payment, which may be higher than the actual mortgage payment.
Different lenders apply different stress rates and coverage requirements. As a result, the maximum borrowing available against the same property can vary considerably.
For our customer, some lenders’ rental stress tests would have restricted the borrowing below the required £420,000.
We therefore needed to identify a lender whose criteria could accommodate the full mortgage amount.
Existing Portfolio Landlord Commitments
Our customer already owned several investment properties with existing mortgage commitments.
When assessing portfolio landlords, lenders may consider the wider property portfolio alongside the individual property being remortgaged.
This meant the application needed to account for the customer’s background properties, mortgage liabilities and overall financial position.
The customer also had existing personal loans and some previous late payments on credit commitments, which formed part of our review.
Capital Raising on an Interest-Only Basis
The customer specifically wanted to release capital for property improvements while retaining interest-only repayments.
We needed a lender that would accept the intended use of the additional funds and provide the required borrowing against a purpose-built London flat.
The customer also wanted a five-year fixed-rate product and the option to add arrangement fees to the mortgage.
These requirements needed to be considered together rather than assessing the interest rate or maximum loan amount in isolation.
What We Did
We reviewed the customer’s financial circumstances, existing property portfolio and borrowing requirements before researching suitable buy-to-let lenders.
Reviewed the Customer’s Financial Position
We examined the customer’s self-employed income, including salary and dividends from their limited company.
We reviewed two years of accountant-prepared company accounts, tax calculations, tax year overviews and bank statements.
We also assessed their existing personal liabilities and background buy-to-let mortgage commitments.
This allowed us to understand the wider financial position and identify the lending criteria most relevant to the application.
Researched Specialist Buy-to-Let Lenders
We carried out whole-of-market research, focusing on specialist lenders offering capital-raising buy-to-let remortgages for portfolio landlords.
A key part of our research was comparing rental stress-testing requirements to establish which lenders could support the requested borrowing.
We identified specialist lending criteria that allowed capital raising at 65% loan-to-value on an interest-only basis.
Rather than relying solely on the results displayed by mortgage sourcing systems, we investigated products directly where suitable options were not appearing through automated searches.
Discussed the Case with Specialist Lender Representatives
We contacted specialist lender business development managers and discussed the customer’s circumstances before placing the application.
This helped us investigate the available lending options, including portfolio landlord requirements, rental affordability and the proposed capital raising.
Through this research and direct lender engagement, we identified West One Loans as a suitable option.
The lender’s criteria could accommodate the customer’s property, borrowing requirements and wider financial circumstances.
The Solution
We recommended a five-year fixed-rate buy-to-let remortgage with West One Loans.
The mortgage was arranged over 25 years on an interest-only basis, with borrowing around £420,000 against the property’s £650,000 valuation.
This represented 65% loan-to-value, leaving £227,500 of equity in the property.
The arrangement enabled the customer to release £30,500 in net additional capital for property improvements.
The selected mortgage also allowed arrangement fees to be added to the loan rather than paid upfront, although adding fees increases the mortgage debt and can increase the interest payable.
The interest-only structure kept ongoing payments within the customer’s budget, while the five-year fixed period provided predictable interest payments.
As the mortgage was interest-only, the outstanding capital would still need to be repaid at the end of the term.
Why This Approach Worked
The key to this case was identifying a specialist lender whose rental affordability calculations supported the borrowing required.
Although the customer had substantial equity and a strong personal income, the existing property portfolio and rental stress-testing requirements still influenced lender selection.
Our research identified that West One Loans could accommodate the required loan amount where other lenders’ calculations would have restricted borrowing.
Direct engagement with lender representatives was also important because the available sourcing results did not initially reveal all the suitable options.
By reviewing the customer’s wider circumstances and researching beyond standard product searches, we identified a mortgage that met the capital-raising requirement without changing the preferred repayment structure.
The Result
Our customer successfully completed their buy-to-let remortgage with West One Loans.
The new mortgage provided around £420,000 in total borrowing, including £30,500 of net additional funds for property improvements.
The customer secured a five-year fixed-rate product over a 25-year term, maintaining interest-only repayments within their budget.
The mortgage also allowed them to retain £227,500 of equity in the London flat while accessing the additional capital required.
What This Case Shows
This London buy-to-let remortgage case study demonstrates why lender selection is particularly important for portfolio landlords seeking to raise additional capital.
The amount a landlord can borrow is not determined by property value alone. Rental stress tests, existing mortgage commitments, personal financial circumstances and the purpose of additional borrowing can all influence the available options.
It also highlights why researching specialist lenders directly can be valuable when standard mortgage sourcing results do not identify a suitable product.
In this case, understanding West One Loans’ lending criteria helped us arrange the required capital raising while maintaining the customer’s preferred mortgage structure.
Speak to Kerr & Watson
If you own multiple rental properties and are looking to remortgage or release equity for further investment or property improvements, Kerr & Watson can help.
We advise portfolio landlords on buy-to-let mortgages, including capital raising, limited company borrowing and more complex rental affordability requirements.
Contact Kerr & Watson to speak with a mortgage adviser about your buy-to-let remortgage options.
