The Secret Landlord Even cautious borrowers are being turned away

I passed the lender’s colossal 10.3pc stress test, but still it will not lend to me

I am a prudent borrower. For the past decade – while the rest of the country embarked on a cut-price borrowing frenzy – I have focused on paying down debt. Reducing my mortgage debt, paying off properties and owning outright is my ultimate aim.

Many of my landlord friends thought I was crazy: “Why pay back debt? It’s so cheap,” they said. “You should borrow more while it is so cheap.”

I will not deny that I have been tempted, and I have availed myself of some cheap credit, but at the back of my mind I’ve always had this nagging thought: whatever you borrow needs to be paid back.

Of course, that line of thinking runs contrarian if you want to be mega, mega rich, but having built my portfolio, I became protectionist.

I didn’t want to lose it. I knew cheap credit had got me started – but at some point that debt would hurt. Hence the reason I wanted to port a five-year fixed-rate mortgage at 1.99pc on a property I’m selling to a different property I’m keeping.

The low-rate mortgage deal almost kept me locked in, but as it is, I needed the proceeds of the sale to pay down the debt on a less lucrative deal: a tracker standard variable rate (SVR) of the Bank Rate plus 1.75pc.

For the last few years that deal has been a blinder, but not now. I would have remortgaged previously, but it is a short- lease flat, so new lending is a non-starter. More fool me for thinking there may be any veracity in the Leasehold Reform Bill.

Throughout my property journey – even at the very start when mortgage rates were nudging 6pc, I’ve opted for five-year fixes. I like to be able to plan ahead, which is why I even took out a 10-year fix last year. I always check the products are portable so that if plans change, the product could be moved to a different property. For the last two decades I’ve not had to use this porting feature, until now.

So, I called the lender to discuss how mortgage porting works, only to discover: porting is not as easy as you would think. First, despite being with the lender for more than 17 years, having a few mortgages with them and ‘I can’t port my mortgage, so now I have to pay the bank’s hefty fee for redeeming early’ making regular overpayments, if I wanted to port the existing mortgage to a currently owned property, but with a different lender, I would have to complete an entirely new application. This would take eight to 10 weeks.

Second, despite the fact I was trying to avail myself of the remaining years of the fixed- rate deal at 1.99pc, I was informed I would also have to pass its stress test for borrowing.

This equated to a whopping 10.3pc interest cover ratio ( gross rental income to mortgage payments).

Third, when I told the lender that to meet such a stress test would mean a hefty hike in rent to the existing tenant, I was informed that unless I provided proof of that rent via a signed assured shorthold tenancy, it would not give me the loan. That loan, by the way, was with a 50pc deposit.

Fourth, not wishing to hike the rent by 22pc on an existing and good tenant, I suggested to the lender that it reversed the calculation and tell me what I could borrow against the current rent. It promptly did the calculations and informed me I would have to find another £11,000 to reduce the mortgage balance. I agreed to this.

Fifth, after all of the above stress testing, lowering my already-low borrowing, telling the bank intimate details of my income and blood group, it said it would look into my case and call me back.

The call came within a couple of hours to tell me: no. No, it would not port my mortgage. The reason was nothing to do with the stress test, or income, or borrowing, but because I owned more than 10 properties.

Loaning money to me would apparently be a “breach of mortgage conditions”.

I was stunned, so I asked why it had such a policy and what research had been conducted to prove people who owned more than 10 properties (even without mortgages) were such a risk? I didn’t get an answer.

What I did get an answer to is this: porting is in no way, shape or form as easy as I had thought.

Rules and regulations can change at the drop of a hat and they are applied regardless. The other thing I’ve learnt, but pretty much knew all along: the bank always wins.

I can’t port my mortgage, so now I have to pay the bank’s hefty fee for redeeming early.

The Secret Landlord is by an anonymous buy-to-let investor. Write to her at secretlandlord@ telegraph.co.uk