September 30, 2025

How You Should Structure Your Next Mortgage

14 minutes

Simon examines the essential mortgage decisions for property investors, addressing whether to fix or vary a mortgage rate, the optimal time to remortgage given current interest rate freezes, plus the strategy behind using interest-only mortgages for investment properties versus repayment mortgages for a personal home

KEY TAKEAWAYS

Many people whose fixed or discounted mortgage terms have ended are now on their lender's Standard Variable Rate (SVR), which can be very expensive (the Bank of England rate plus 3% to 5% or more).

Given the Bank of England's current freeze on rates and uncertainty about future increases to control inflation, fixing a mortgage rate now for stability—often for five years—is a recommended personal strategy, even if rates aren't as low as they were previously.

Some lenders are charging high arrangement fees (up to 7%) to lower the monthly interest rate, which can improve monthly cash flow, especially if the fee is added to the loan and the long-term property value growth is expected to offset the cost.

For investment properties, an interest-only mortgage is generally preferred, as it allows investors to pay only the interest, maintain better cash flow, and benefit from the property's capital growth over time, while repayment mortgages are typically used for a personal home.

BEST MOMENTS

"I don't think we will ever go back to that half percent base rate."

"They're lowering the interest rate we pay, but then loading the difference into the arrangement fee."

"I think if interest rates do come down over the next six months or so, more people are going to come back into the property market wanting to buy property, the demand will go up and thus people be paying more for their property purchases."

"I think being able to borrow from banks is amazing."

VALUABLE RESOURCES

To find your local pin meeting visit: ⁠www.PinMeeting.co.uk⁠ and use voucher code PODCAST to attend you first meeting as Simon's guest (instead of paying the normal £20).

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Simon Zutshi, experienced investor, successful entrepreneur and best-selling author, is widely recognised as one of the top wealth creation strategists in the UK. Having started to invest in property in 1995 and went on to become financially independent by the age of 32.

Passionate about sharing his experience, Simon founded the property investor’s network (pin) in 2003 ⁠www.pinmeeting.co.uk⁠ pin has since grown to become the largest property networking organisation in the UK, with monthly meetings in 50 cities, designed specifically to provide a supportive, educational and inspirational environment for people like you to network with and learn from other successful investors.

Since 2003, Simon has taught thousands of entrepreneurs and business owners how to successfully invest in a tax-efficient way. How to create additional streams of income, give them more time to do the things they want to do and build their long-term wealth.

Simon’s book “Property Magic” which is now in its sixth edition, became an instant hit when first released in 2008 and remains an Amazon No 1 best-selling property book.

Simon launched his latest business, ⁠www.CrowdProperty.com⁠, in 2014, which is an FCA Regulated peer to peer lending platform to facilitate loans between private individuals and property professionals.

This Podcast has been brought to you by Disruptive Media. ⁠https://disruptivemedia.co.uk/

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By Simon Zutshi

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