Buy to Let Mortgage

Buy-to-Let mortgages have become the go-to choice in recent years

Buy-to-Let mortgages have become the go-to choice in recent years because of lower interest rates. This, combined with strong rental markets, especially in university cities and towns, has lead to an increasing number of investors that want to add properties to their investment portfolio. A Buy-to-Let mortgage is a great way to do so. This is also referred to as an investment mortgage, as lenders consider the rental income you will make from the property when determining whether you can afford the mortgage. It is perfectly suited to those looking to diversify their investments.

So, what will the lender consider when determining whether you are a suitable candidate for this type of mortgage? In most cases, they will look for 125 – 145 per cent prospective rental income of the loan’s monthly interest payment. In some instances, you may need to have at least £25,000 per annum of personal income.

What are the benefits of choosing Buy-to-Let?

  • This type of mortgage is ideally suited to those that are having trouble selling their home yet want to keep the property and rent it out for a secondary income.
  • There is a wide range of Buy-to-Let mortgages, ranging from fixed rates to variable trackers, ensuring you find the perfect one for your situation. Nevertheless, you should seek expert advice when making your decision.
  • The terms of the mortgage are perfectly suited to those looking to rent the property out. If you were to go for a residential mortgage, you would be subject to higher mortgage arrangement fees and a 25 per cent deposit.

Please note that you do need to be honest with your lender in regards to your intentions concerning renting the property out, otherwise you could breach the conditions of your mortgage.

Your property may be repossessed if you do not keep up repayments on your mortgage.

Not all Buy to Let Mortgages are regulated by The Financial Conduct Authority.

 

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