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Buy to Let Mortgages site

If you have been thinking about purchasing a second property with the intention of letting it out, you will have also been considering the available funding options. The most common of which being the buy-to-let mortgage – a specialist facility for these types of investments.

For the most part, buy-to-let mortgages are very similar to conventional mortgages. There are, however, also several key differences that must be taken into account, including but not limited to the following:

  • Buy-to-let mortgage rates are often slightly higher
  • Overall borrowing costs can also be elevated
  • Most lenders request a minimum 25% down payment
  • Buy-to-let mortgages are often interest-only mortgages
  • Additional secured loan options may be available

The key to accessing the best buy-to-let mortgage lies in obtaining independent expert advice at the earliest possible stage. Whether this is your first buy-to-let mortgage or you are looking to expand existing portfolio, speak to an established broker to gain important insights into the available options.

How Much Can I Borrow with a Buy-to-Let Mortgage?

The amount you can borrow with a buy-to-let mortgage will be determined by myriad factors, including the following among others:

  1. The value of the property you are buying
  2. Projected monthly rental income
  3. Your current financial status
  4. Evidence of employment and income
  5. The size of the down payment you offer
  6. Your recent credit history

It is typical for a buy-to-let lender to expect a minimum monthly rent income of 25% to 30% higher than the mortgage payment on the property you intend to purchase. This is to ensure a certain amount of breathing room, enabling you to comfortably meet your repayment obligations long-term.

Accessing a formal estimation of projected rental income is as simple as talking to a reliable and reputable lettings agent, who can assess the property, the local market and come up with a figure. However, your lender may insist on conducting their own valuation of both the property and its rental yield potential, before accepting your application.

Where Can I Get a Buy-to-Let Mortgage?

Most major banks and lenders on the UK High Street offer buy-to-let mortgage products for most types of properties. Mainstream lenders; however, tend to be somewhat selective when it comes to eligible borrowers, along with the current condition of the properties they lend on.

For example, along with having a flawless credit history and extensive proof of income, you may also need to show evidence that the property you wish to purchase is habitable and in a good state of repair. If you are thinking of purchasing a ‘fixer-upper’ that needs extensive repairs or renovations, most major lenders will not issue a buy-to-let mortgage against it.

Irrespective of your requirements, it is advisable to consult with an independent broker before applying. This will help you establish the best funding option for your buy-to-let property investment, while at the same time ensuring you get the best possible deal to suit your requirements and your budget.

Last Updated: Apr 9, 2020 @ 12:50 pm
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