How much can I borrow
The Prudential Regulation Authority, an regulatory body of the Bank of England, made a number of changes to the buy to let mortgage market. Lenders now have to implement a strict income stress test, a review of the applicant’s property portfolio and insist on a rental coverage ratio of at least 145%
Find out how much you could borrow with our mortgage table above.
How to calculate mortgage repayments
To plan your buy to let finances properly, you need to know just how much you are likely to have to repay on a monthly basis.
Use our mortgage calculator above by doing the following:
- Provide the purpose of your mortgage
- Enter the value of the property
- Input the amount you wish to borrow
- Choose the type of mortgage you want
- Indicate your preference on capital and interest or interest only mortgage
- Decide on the length of mortgage
After completing all the necessary fields with the information above, the mortgage calculator will produce the best mortgage deals on the market.
What is a fixed rate mortgage
Fixed rate buy to let mortgages give you a mortgage with a fixed rate for an introductory period. Banks typically have fixed rate mortgages from 2,3,5 or 10 years.
Having your mortgage interest rate fixed for a set period of time could be an attractive prospect. However, you never know what might happen to the interest rates over the course of your fixed term. Bear in mind that a good interest rate now may not look so favourable in a few years’ time.
What is a tracker rate mortgage
A tracker rate buy to let mortgage interest rate is heavily dependent on the Bank of England’s base rate. Therefore, if the Bank of England decide to hike their base rate, then all the tracker mortgages’ interest rates will increase.
Repayment or interest only
Repayment mortgages are a type of mortgage that allows you to repay the capital and the interest of the mortgage at the same time. Typically, these mortgages have much higher monthly repayments.
Interest only mortgages only require you to pay the mortgage’s interest each month. As a result, the mortgage repayments are much lower than other mortgages, which make them ideal for buy to let properties.
If you want to pay your mortgage off as fast as possible, you may want to consider making overpayments.
However, it is important to note that not all lenders will allow you to make overpayments on a mortgage. Some lenders may even charge early repayment fees if you make too many overpayments.
If you want to explore your mortgage options, it is a good idea to speak to an independent mortgage broker who will be able to offer impartial advice.