Lloyds bank offer buy to let mortgages to customers throughout the UK who wish to invest in rental property.
Types of Buy to Let mortgage
There are several different popular kinds of buy to let mortgage you can normally take out, depending on your borrowing requirements and personal circumstances.
Interest only buy to let mortgages are best for people who want to keep their monthly repayments low and are happy to pay off the full capital of the mortgage when the loan term ends.
Capital and interest mortgages are intended for borrowers who can afford to pay back a little more each month and want to pay down the capital of the loan over its lifetime.
Fixed rate buy to let mortgages mean you pay a set rate of interest for an initial period, often 2-5 years, before switching to a standard variable rate of interest.
Tracker mortgages keep your interest rate set at a fixed interval about the Bank of England Base Rate (or an equivalent) so your interest rate stays connected to inflation.
Lending criteria for Lloyds Buy to Let mortgages
When looking at borrowing on a rental property with Lloyds, there are several key points you should bear in mind.
You could apply for a Buy to Let mortgage if:
- you are at least 25 years old
- You will not be over 80 years old at the end of your mortgage term
- You are not a first time buyer (Buy to Let mortgages are not available to first time buyers)
- You already own a property in the UK (or one person named on the mortgage already does)
- You have at least 25% of the price of the property as a deposit
- The property is being used for rental purposes, and is self-funding (the rent needs to be higher than the mortgage payment)
- The property is in good condition and not divided into separate units
- The property has a Minimum Energy Performance Certificate Rating ‘E’ or above, unless it is exempt from the regulation e.g. a grade two listed building
- The value of the property is £50,000 or more
- You do not have more than 10 buy-to-let mortgaged properties in total with any lender (including this application)
If you do not match the lending criteria for Lloyds, you may still be able to access the finance you need. This is because different lenders have their own lending conditions, which may be more applicable to your situation. A professional mortgage advisor will be able to help you find the most appropriate forms of buy to let finance for you.
Interest rates on Lloyds Buy to Let mortgages
Several different elements of a mortgage deal will affect the kind of interest rate you are offered. The most important tend to be how much you want to borrow, how long for and your loan-to-value (LTV) ratio.
LTV is how much your loan is relative to the market value of your property. So, if you have a property worth £100,000 and want to borrow £60,000 on it, then your LTV would be 60% as the loan is 60% of the value of the property. Lenders will tend to give better interest rates on mortgages with a lower LTV.
Compare Buy to Let mortgage rates
To get the best possible return on your investment with a buy to let property, you need to keep your monthly repayments as low as possible.
Our free mortgage calculator can help you find the best deals on mortgage finance from all the top lenders, giving you access to the most attractive interest rates from across the market.
Independent Buy To Let Mortgage Advice
Remortgaging is particularly popular at the moment as interest rates are low.
Whether it will be a good idea for you to remortgage depends on a number of factors, including your goals and your personal circumstances.
However, in general, if interest rates are lower than you are currently paying on your mortgage, it may be a good time to remortgage.
If interest rate are higher than you are currently paying, it may be better to look at other options, such as a second mortgage or a personal loan (if you aim is to borrow more).
If you are not sure whether now is the right time to remortgage, it is a good idea to speak to an independent mortgage broker who will be able to offer impartial advice on Lloyds bank & alternative lender options.