Can you get a Buy to Let mortgage?
To qualify for a Buy to let mortgage you will normally need to:
- Own your own home
- Have a 25% deposit
- Have a projected monthly rental income in excess of the monthly interest on the mortgage
- Be over 25 (depending on the lender)
- Have an income in excess of £25,000 a year (again, depends on the lender)
In addition, many lenders have a maximum number of Buy to Let mortgages customers are allowed at a time and a maximum combined value that can be taken out. Common limits are 3 properties and combined total loan value of £2 million (although this varies from provider to provider).
How much will a Buy to Let mortgage cost?
The main cost of a Buy to Let mortgage is the monthly repayments. These include the interest on the loan and may include repaying a proportion of the capital (depending on your mortgage deal). Many landlords choose interest-only mortgages where the capital is repaid when the mortgage term ends.
The interest rate you pay on your Buy to Let mortgage will usually depend on:
- How much you borrow
- How long you borrow for
- Your loan to value ratio (LTV)
- How much debt you already have
- Your credit rating