With so many buy-to-let (BTL) mortgage products to choose from, where do you start? Our latest research* looks at the top five reasons why landlords choose to use a particular lender.
5. It’s all about the money
At the lower end of the scale, but still important, 20 per cent chose their lender because they offered the lowest arrangement or product fee. Good financial planning can mean the difference between a successful letting business and financial difficulty, so being prudent from the beginning is a good place to start.
4. I can give you what you want
Nearly a quarter (24 per cent) of landlords were swayed by the specific criteria used by their current lender. Landlords have specific requirements, and it’s no wonder that this makes it into the top five when almost six in ten (58 per cent) landlords say that lenders don’t consider their individual circumstances.
3. Déjà vu
Whether it is because they have a bank account or previous residential or BTL mortgages, an existing relationship is enough for 25 per cent of landlords to go back to a lender they’ve used before. Landlords seem to be creatures of habit when it comes to choosing a lender and it just goes to show that good service breeds repeat business.
2. Get low
Nearly a third (31 per cent) chose their lender because it offered the lowest interest rate, which when doing overall calculations including fees and other costs, is high up on the list of top five reasons and is one of the most important aspects when sourcing new loans. But it doesn’t make the number one spot…
1. Somebody told me
… The top reason cited by landlords when choosing a lender – at 42 per cent – is because they were advised by an intermediary. It is not surprising to see so many landlords using a particular lender for this reason when previous NLA research shows that as many as seven in 10 say they rely on brokers or intermediaries to find them the best deal.
Have you got the lender know how?
It is plain to see that value for money and an existing relationship is what most landlords rely on when choosing a lender.
If you don’t trust yourself to make an informed decision then using a broker or intermediary is good way to start. However if you like to do the legwork yourself make sure you check out the deals offered by NLA Mortgages. NLA Mortgages provides a free online buy-to-let mortgage search facility to help you find the best suited product for you, sourcing from over 600 mortgage products including offers that are not available in the general marketplace.
*NLA Quarterly Landlords Panel research – Q1 2015 (1,070 respondents)