Portfolio refinancing

The cost of refinancing a portfolio

Refinancing several properties at once can unlock a better rate or release equity, but the transaction costs are multiplied across each title, not just incurred once. Weighing the total cost against the benefit properly is essential before committing.

Category: Costs & pricing

Product: Commercial Loans

Valuation cost: Charged per property in most cases
Legal cost: Scales with number of titles and lenders involved
ERC exposure: Check existing facilities before switching
Arrangement fee: Typically 1%–2% of the new facility

Why portfolio refinancing costs more than a single property

Each property in the portfolio typically needs its own valuation, and legal work scales with the number of titles, particularly if properties are held across multiple existing lenders who each need to be redeemed and discharged. This can make the total transaction cost significant, even where the arrangement fee percentage looks the same as a single-property deal.

Checking for early repayment charges first

Before committing to a refinance, check whether any of your existing facilities carry an early repayment charge — this is one of the most common costs that gets missed when portfolio landlords chase a lower headline rate, and it can materially change whether refinancing is worthwhile right now versus waiting.

Consolidating multiple lenders into one facility

Bringing several properties currently held with different lenders under a single new facility can simplify management and sometimes improve overall pricing through economies of scale, but it also means redeeming each existing loan individually, incurring separate legal and potentially ERC costs on each one at the same time.

Calculating whether the refinance pays for itself

The simplest test is to compare total transaction costs (valuations, legals, arrangement fee, any ERCs) against the total interest saving over your expected holding period. A modest rate improvement across a large portfolio can still comfortably outweigh the upfront cost, but it's worth running the numbers rather than assuming a lower rate is automatically worth it.

Frequently asked

Do I need a separate valuation for every property in the portfolio?

In most cases yes, since each property needs to be individually assessed for value and condition, though some lenders offer a streamlined process or desktop valuations for straightforward, lower-value properties within a larger portfolio.

Can portfolio refinancing costs be added to the new loan?

Arrangement fees can often be added to the facility, but valuation and legal costs are typically paid upfront, so it's worth budgeting for these separately even if the arrangement fee is deferred.

Is it cheaper to refinance with my existing lender rather than switch?

Sometimes — a product transfer with your existing lender can avoid some legal and valuation costs, though it may not achieve as competitive a rate as switching. We compare both routes before recommending one.

How do I check for early repayment charges across multiple mortgages?

Your existing mortgage offer letters or annual statements should set these out, but if you're unsure we can request redemption statements from each lender to confirm the exact figures before you commit to refinancing.

Does refinancing a portfolio always mean releasing equity?

No — some landlords refinance purely to secure a better rate or consolidate lenders without releasing any additional funds, while others use the opportunity to release equity for further investment. The structure is tailored to your objective.

Model your portfolio refinance costs properly

Call 0345 2690628 for a full cost-versus-saving breakdown across your portfolio.

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