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Buy to Let Mortgage Advice

When you take out a buy to let mortgage to buy a property for rental purposes, it is important to make sure you have the right advice. This can help you get the best deal possible and have a significant impact on what kind of return you see on your investment.

It is highly worthwhile speaking to an experienced mortgage advisor as they will be able to help you identify the best value mortgage products for your requirements. You can also try out our free mortgage calculator which can help narrow down your options and make your choice a little easier.

Types of Buy to Let mortgage

Buy to let mortgages are usually offered on an interest only or capital and interest basis. This allows you to choose whether you would rather pay less per month and pay off the capital at the end of the mortgage, or pay more each month and have less, or nothing, to pay off when the mortgage ends.

You will also usually be able to choose between a fixed rate buy to let mortgage or a tracker buy to let mortgage. Fixed rate means you will pay a set rate of interest for an introductory period (normally 2-5 years). Tracker means the interest rate will be set at a standard percentage above the Base of England Base Rate (or an equivalent) so your interest rate will tend to stay in line with inflation.

Interest rates on Buy to Let mortgages

When thinking about what sort of interest rates you may end up paying, it is worth considering some of the main factors lenders look at to determine your rates.

  • How much will you need to borrow?
  • How long do you want to repay over?
  • What percentage of your property’s value do you need to borrow (this is known your LTV or loan to value ratio)

Lenders will tend to look at your likely monthly rental income when deciding how much you can afford to borrow. They will usually want the rent to exceed the monthly interest payments. This means the better interest rate you get, the less rent you will need to charge to make a profit.

Will you qualify for a Buy to Let mortgage?

Every lender has their own personal requirements for who they will provide buy to let mortgages to. There are some general criteria that most lenders will look for however:

  • Do you own your own home?
  • Are you earning over £25,000 per year?
  • Are you over 25 and will you be under 70 when the mortgage term ends?
  • Do you have a good credit history?

Even if you don’t meet these requirements, some lenders may still be willing to offer you the money you need. To find out which lenders are most likely to be able to help, it is worth consulting with a professional mortgage advisor as they should be able to point you in the right direction.

Find the best deals on Buy to Let mortgages

Our free mortgage calculator can make finding the best deal on your buy to let mortgage much faster and easier. All you have to do is click on the link and pick “Buy to let” in the “Reasons for mortgage” section. Then just share some basic information about your borrowing needs and we will show you top deals from leading providers across the industry.

Latest news

Cost of fixed rate mortgages have started to increase as Bank of England rate rise looms

A number of high street banks have started to increase their mortgage rates. The reason for this is that banks are having to pay more to access the funds they lend out to UK homeowners.

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