Compare Buy To Let Mortgages
As a general guide a buy to let mortgage is a sum of money that your bank lends you to purchase a property that you will use for rental purposes. The main difference over a standard mortgage is that the lender will take into account the rental income that will be generated from the property as the main way of paying the mortgage loan, and in some cases the borrower may also be able to factor in other income.
Rental and additional income will normally be independently assessed on an ability to pay basis. Minimum rental income again will differ from one lender to the next but 125% of rental cover is often required. Many buy to let mortgage lenders have tightened up their lending criteria making it difficult for first time landlords to get onto the market. The minimum deposit levels are typically 25% and those lenders that require less downpayment will charge in interest for taking on this increased "risk".
Some lenders will have a maximum property portfolio and all will have a maximum total advance e.g. £2 million. It is important to note that product fees on buy to let mortgages are often high e.g. 2.5% of the mortgage so getting a specialist broker to help you get a deal can save both time and money.
If you are considering a buy to let property general guidance would be:
- Choose the right property for you - think about location, house size, condition and your tenants.
- Shop around for the best mortgage deals and use a specialist buy to let mortgage broker (preferably regulated by the FCA)
- Find a flexible buy to let mortgage deal that suit your personal requirements.
- Think about the extra costs will you have to spend on such things as maintenance, furnishings, agency fees, insurance, decorating and legal costs. Budget for these!
- Go with a professional and legitimate letting agency.
If you are looking for a buy to let mortgage advice and quotes, you may want to start your search with us by using the tables above or by calling our buy to let mortgage team on 0117 332 6063.