Buy to let mortgage to replace an end of Term Pepper mortgage

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errigal

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In the middle of 2027, the 20-year interest-only tracker mortgage (originally BOSI, now Pepper) will complete its term. While I have paid some lump sums off it, there remains >100k to pay on the loan. The property is worth twice the remaining loan.

I don't want to sell the property unless I have to, so my preference would be to take out a new buy-to-let mortgage with another provider, allowing me to close everything off with Pepper who I don't believe will offer the option for me to extend the loan for another 5 years.

However, my understanding is that I will be paying considerably higher rates than the 2.9% rate I'm currently paying.

Any advice on the best rates that may be out there or banks offering the most competitive rates?

TIA!
 
Do you have a tenant in it at the moment?

You should probably give the tenant notice and just sell the property when the tenant leaves if you are not able to repay the loan from your savings.
 
What happens if at the end date you have not sold the property / repaid the mortgage ?

I suggest that you read the mortgage contract carefully. Can Pepper charge you a higher interest rate ? I don’t think so. Can they appoint a receiver ? Again I don’t think so.

In practice could you just continue paying the interest and perhaps some capital until the loan is repaid ?

How difficult would it be for Pepper to force a different outcome ?

I am a few years behind you with 2 similar mortgages.

There is another thread on the topic. https://www.askaboutmoney.com/threads/will-pepper-appoint-a-receiver.243714/
 
Yes, have a tenant in situ.
Selling is an option for sure. But there will be CGT impact, and obviously, I will no longer have the rental income stream going forward. So it may not be my preferred option in my circumstances, but it really depends on what a new loan might look like.

Pepper wrote to me recently, reminding me that the capital is due to be paid by July 2027 and that if not paid, it will accrue interest in accordance with the terms and conditions of the mortgage (which I need to re-familiarise myself with). It references that the interest rates that apply again will be in line with the Ts and Cs.

Aside from that, I've no idea about what Pepper might do.

Thanks!
 
errigal said:
Aside from that, I've no idea about what Pepper might do.
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They might foreclose or don't a receiver?

Will Pepper appoint a Receiver?

Reviving this old thread. Asking for a friend who has several rental properties with pepper. They were interest only loans over 20 years. Several mortgage terms ended in summer 2025. But the mortgage payments have continued at the same lowish rate. Properties values are in line with amount due...
www.askaboutmoney.com
errigal said:
Selling is an option for sure. But there will be CGT impact,
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The CGT liability is unavoidable so you need to plan for dealing with it.
errigal said:
there remains >100k to pay on the loan. The property is worth twice the remaining loan.
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Will the €100K cover the CGT liability?
 
If you have a family home which is mortgage-free, you might be able to remortgage it? It would be a lot cheaper than remortgaging your buy to let. Neither option may be available to you, but check them out now.

The difficulty you face is that you have no idea what Pepper might do.

If they appoint a Receiver you are likely to lose most of your equity. They will probably hang on to it for a few years collecting the rent and running up Receiver's fees. Or the tenant might just stop paying rent.

You are in control now. It will take a few months to get rid of the tenant. If you don't cross any t or dot any i, you might have to start again.
 
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