RBS BTL Mortgages
Royal Bank of Scotland (RBS) provide buy to let finance for first time landlords and current landlords allowing them to acquire new rental properties or raise new finance on their existing portfolios.
Types of Buy to Let mortgage
There are several main types of mortgage you can take out with RBS. Which you choose will affect how much you end up having to repay and what kind of return you see on your investment.
Interest only buy to let mortgages let you pay just the interest on your mortgage each month and pay off the capital at the end. This means you can earn more each month, but will usually end up paying more back over the lifetime of the mortgage as you will pay interest on the full capital for the whole term.
Capital and interest mortgages let you pay off a little of the capital each month on top of the interest. This means you will earn less each month, but will normally end up paying back less in total and will have a smaller amount or nothing to repay when the mortgage ends.
Fixed rate buy to let mortgages give you a set rate of interest for the first few years of your mortgage (usually 2-5 years) after which you will pay a standard variable rate. This can make your repayments more predictable, but could leave you worse off than otherwise if interest rates drop.
Tracker mortgages tie the interest rate you pay to the Bank of England Base Rate (or an equivalent). This means your interest will tend to keep pace with inflation which means it will also tend to stay in line with average rental increases across the market.
Lending criteria for RBS Buy to Let mortgages
To qualify for a buy to let mortgage with Royal Bank of Scotland you must:
- Be a UK resident
- Be aged 18-70
- Have at least 25% deposit (or 35% for new builds)
- Need to borrow at least £25,000 over a minimum of 3 years
- Not own more than 9 buy to let properties
- Borrow no more than £3.5million in total
- Be buying or remortgaging a property that is habitable and worth £50,000-£500,000
Different lenders have their own criteria which may be more or less strict than those required by RBS. This means even if you do not qualify for a buy to let mortgage with RBS, you may still be able to borrow the money you need elsewhere. A mortgage advisor will be able to guide you on your best options.
Interest rates on RBS Buy to Let mortgages
One of the biggest factors in determining the interest rates you will pay is your LTV or loan to value ratio. This shows how much you want to borrow relative to the market value of your property as a percentage. So a £50,000 mortgage on a £100,000 property would be an LTV of 50%. Most lenders will offer better rates on mortgage deals with a lower LTV.
Your interest rate will affect how much you need to earn in rent. This is because the majority of mortgage providers will want the monthly rental income on a property to exceed the interest payments on your mortgage. So the higher your interest payments the more you will need to charge in rent.
Compare Buy to Let mortgage rates
Our free mortgage calculator is designed to make it as easy as possible for borrowers to get the best deal possible on buy to let finance. All you need to do is follow the link and choose “Buy to let” from the “Reasons for mortgage” drop down. Then the calculator can match you with leading deals that match your requirements from across the market.
Need independent buy to let mortgage advice?
Independent Advice
If you are not sure about your options speak to our independent mortgage broker team who will be able to offer impartial advice or you can call us on 0117 403 3464
