What is Portfolio Finance?

If you are new to portfolio finance, here is a quick explanation of what portfolio finance is and how it works.

A portfolio mortgage allows landlords to place all of their buy to let mortgages under one mortgage. A portfolio mortgage is treated as a single account. Rather than having separate lenders for each property, the entire portfolio is undertaken by one lender, hence one monthly payment.

The portfolio is registered as a limited company and finances and expenditures are treated exactly the same as any other business model. A property portfolio is a term used for when a landlord has at least four properties. Technically, a portfolio could consist of two properties. From a lender’s perspective, they would usually class four properties to be the bare minimum for a portfolio.

Lenders introduced portfolio mortgages to allow landlords to manage their buy to let finances with greater clarity. Rather than having multiple mortgage statements, portfolio mortgages allow for one monthly statement and one payment, simple. Landlords with portfolios don’t have to have a portfolio mortgage and it is entirely optional.