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Buy To Let Mortgage Advice
If you already own a second property that you want to rent out, or you’re considering becoming a landlord to bring in some extra cash each month, you’ll probably need a buy-to-let (BTL) mortgage.
Your mortgage repayments will be the biggest ongoing cost of your BTL, so whether you’re investing in your first property or adding to an existing portfolio, securing the right deal is essential to maximise your potential profit.
We’ll provide you with your very own Buy to Let mortgage advisor, fully qualified and experienced in the Buy to Let industry and everything that entails. Whether you need someone to help decipher complicated jargon, or need a professional to push through a time-sensitive application, we can help.
What are the criteria for a buy-to-let mortgage?
Are buy-to-let mortgages interest-only?
Most BTL borrowers prefer to take out interest-only mortgages, because they mean lower outgoings. Repayment mortgages are also available, and are becoming a popular alternative
Are buy-to-let mortgages more expensive?
Landlords seek out cheaper properties, but BTL mortgages cost more – both in higher interest rates and larger deposits – as borrowers are more of at risk to lenders than owner-occupiers
How much can you borrow?
How much you can borrow will depend on your deposit, personal circumstances and rental income. Lenders normally require you to earn more in rent every month than you repay on your mortgage
What are the tax implications of buy-to-let mortgages?
The once-generous tax allowances for BTL mortgages have changed, but borrowers are still entitled to a 20% credit on their interest payments. Some choose to set up limited companies, so specialist advice is encouraged
What is a buy-to-let mortgage?
A buy-to-let mortgage is a mortgage sold specifically to people who buy property as an investment, rather than as a place to live. If you plan to rent out a new property, most lenders will prefer you not to finance your purchase with a standard residential mortgage. Without a BTL mortgage, you won’t usually be permitted to let out a property for profit unless you own it outright.
Depending on your preferences, BTL mortgages, sometimes referred to as ‘landlord mortgages’ can be used to buy residential rental property, student accommodation, holiday homes, or anything in between.
You may need to consider a buy to let mortgage if you are:
- Buying a house to rent out for additional income.
- Purchasing a holiday home which you intend to let out.
- An accidental landlord, if you’ve decided to let out a property you’re unable to sell, or have inherited.
Did You Know?
Deposit requirements for buy-to-let mortgages are far higher than residential ones, as they are considered a riskier investment.
The standard loan-to-value (LTV) for BTL is around 75-80%, which translates to 20-25% deposit - although some providers may be more generous for the right applicant. Likewise, if you pose a greater risk in other areas (e.g. bad credit or low rental yield), a lender may have higher deposit requirements to balance out the risk.