Buy To Let Mortgage Advice
A buy to let mortgage is a loan for someone who purchases a residential property with a view to renting it out as an investment.
Mortgage lenders view Buy To Let as a greater financial risk because immediate vacant possession is not always guaranteed. Therefore mortgage lenders tend to:
- Ask for bigger deposits, usually 15-20%
- Charge a higher rate of interest
- Require the rental income to be greater than the interest element of the monthly payment.
- Usually charge higher mortgage arrangement fees or slightly higher rates
- Require a minimum income
- Require the applicant to be a homeowner
Please speak to one our mortgage advisers as we do have access a comprehensive range of mortgage products from across the market and criteria varies from lender to lender. A few mortgage lenders don't require a minimum income. As mortgage brokers we will find you the right mortgage lender.
This is a long term investment which you hope will generate rental income along the way and a profit when you sell the property, but bear in mind that if you need access to some cash a property can take time to sell or re-mortgage. If house prices fall, you might not be able to sell for as much as you had hoped. You would have to make up the difference if the property sold for less than you owe – a risk that increases, the higher the percentage you borrow. If you sell for a profit, you may have to pay capital gains tax. Don’t forget that with a variable rate mortgage, your costs will rise if interest rates go up. This would eat into, or even wipe out, your income and profit.
Mortgage lenders tend to require the rental incomes (normally carried out by a surveyor) to be greater than the monthly payment. If below, further evidence of income is required to cover any shortfall. Some mortgage lenders are happy with the same. Please speak to one of our mortgage brokers for more information.
If you require buy to let mortgage advice; please call one of our mortgage brokers. We have access to a comprehensive range accross the buy to let mortgage market. We'll guide you the mortgage process from start to finish and speak to your estate agents and solicitors.
Will writing and most forms of Buy-to-let mortgages are not regulated by the Financial Conduct Authority.
A mortgage is a loan secured against your property. Your property may be repossessed if you do not keep up repayments on your mortgage.