Buy to Let Mortgage Lenders
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Buy to Let Mortgage Rates
Buy to Let is a popular and expanding niche area in the mortgage industry, and as more and more lenders enter the market, it is becoming increasingly competitive.
As with all kinds of mortgages and lending, interest rates are set according to the level of risk the lender perceives they are undertaking. As such, a Buy to Let investment is seen as a higher risk than a more conventional type of mortgage – a rented house is more likely to suffer damage or defaults on payments than a house the borrower is living in. Because of this perceived risk, the interest rate for a Buy to Let mortgage will be higher than that for a straightforward residential mortgage.Read More
It can seem difficult to find a decent deal on a Buy to Let mortgage, or to know what the best deal is when looking around yourself. This is why it’s always best to approach a specialist mortgage broker, who can give you expert guidance as to the best mortgage to meet your circumstances, but will also have access to deals you will not find widely advertised on the high street, some of which will be exclusive to that broker.
Buy to Let Mortgage Lenders Information
Buy to Let Mortgage Lenders
Buy to Let mortgages were once a distinctly specialist area of lending, and to get a Buy to Let mortgage you would have to approach a specialist lender, who would often handle nothing else apart from this kind of mortgage. The specialist lenders are still very much in the market, and it’s worth remembering that they are still the best option for the most dynamic products, spread of criteria and flexibility.
However, thanks to a huge amount of growth in this sector in recent years, more lenders than ever now offer a Buy to Let mortgage. You will even find reasonable Buy to Let mortgage products on the high street – the field is more competitive and there are many more deals to choose from.
Our team at The Mortgage Centres has a great deal of experience in sourcing the right Buy to Let mortgage for a whole range of customers, in all sorts of circumstances. Please give a call to arrange a free initial consultation.
What Is Buy to Let Mortgage Eligibility?
All lenders will have their own individual criteria for eligibility for a Buy to Let mortgage, and while most requirements will vary from lender to lender, there are a few that remain constant across the board:
The Anticipated Rental Yield
You’ll probably know that the level of borrowing for a residential mortgage is set according to the applicant’s income, but with a Buy to Let mortgage it is calculated according to the anticipated rental income that you can expect from the property. Lenders will generally take a guide of the rent being 125% of the mortgage payments, to build in an allowance for interest rate rises, but this estimate may rise to 145% according to the lender. The precise figure will be down to the individual lender, and will depend on your income tax status, the level of deposit you can supply and whether the mortgage is fixed for a short or longer term.
Income Tax Status
Sometimes, it is possible to get a Buy to Let mortgage based on income other than that gained through rental yields. Bear in mind that this is not something that every lender will be willing to do. Some lenders will take a personal income into account, and in fact may insist on it, in which case they will stipulate a minimum figure, usually £25,000.
The Amount of Equity or Deposit
With a residential mortgage, you can often be accepted with a deposit as low as 5% of the property’s value. Unfortunately, with Buy to Let being seen as a higher-risk investment, lenders routinely ask for a larger deposit, typically at least 15-25%, but sometimes rising to as high as 60% depending on the circumstances.