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Compare Buy to Let Mortgages

Most banks and many building societies provide buy to let mortgages, giving customers a wide range of potential borrowing options. However, having so much choice can make finding the best value buy to let mortgage that matches your borrowing needs a challenge.

Identifying which mortgage products are likely to offer you the best value can be much easier if you use a professional mortgage advisor. We also offer a free mortgage calculator to help your compare and narrow down your options.

Types of Buy to Let mortgage

When looking at buy to let mortgages there are two main types – interest only or capital and interest. Which you choose will depend on whether you would rather pay less each month and have more to repay when the mortgage ends, or pay more each month and have less, or nothing, to pay at the end.

Interest only buy to let mortgages mean you just pay the interest due on the capital each month and pay the capital off at the end of the mortgage term.

Capital and interest mortgages let you pay of the interest on your loan plus some of the capital each month. That way you end up with a reduced amount or nothing at all to pay off when the mortgage ends.

One variant on a buy to let mortgage that is worth thinking about is a let to buy mortgage. This allows you to take a mortgage on your current home to buy a new one, then rent out your old home. This is often a popular option with people who are retiring and want to downsize.

Lending criteria for Buy to Let mortgages

Which buy to let mortgage you apply for may depend on the requirements various providers impose on the borrowers. The exact criteria you need to meet with vary from lender to lender, but there are some common things most lenders will look for.

  • Do you own your own home?
  • Do you earn more than £25,000 per year?
  • Are you aged over 25?
  • Will the mortgage term end before you turn 70?
  • Do you have a good credit rating?

If you do not meet these requirements you may still be able to access buy to let finance, but your options are likely to be more limited. A mortgage advisor will be able to guide you as to which lenders are most likely to offer you a deal on mortgage finance depending on your personal circumstances.

Interest rates on Buy to Let mortgages

The interest rate you pay on your buy to let mortgage will make a big difference to how much of a return you see on your investment. It will also affect how much you need to charge in rent as many lenders will require your monthly rental income to exceed the interest on your mortgage.

Your interest rate will depend on various factors including:

  • How much you borrow
  • How long you choose to repay over
  • Your loan to value (LTV) ratio i.e. what percentage of your property’s market value you borrow
  • The type of mortgage you choose

It is important to shop around and compare as many different mortgage deals as possible to make sure you are getting the best interest rates available.

Compare Buy to Let mortgage rates

Our free mortgage calculator makes it quick and easy to identify buy to let mortgages that match your borrowing requirements while offering great value. All you need to do is follow the link and choose “Buy to let” in the “Reasons for mortgage” section to see highly competitive deals from top lenders 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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mortages.direct is a trading style of Fair Investment Company.

We've been comparing and recommending mortgage deals for many years so you can trust you're in good hands.