Buy To Let Mortgages
Getting the right buy-to-let mortgage will ensure that you get the most appropriate deal for you and your investment.
Helpful Quick Guides
What are the lending conditions?
While conventional mortgage lenders will want to check the affordability of the repayments, a buy-to-let mortgage can come with a number of other conditions:
Minimum valuation – Some lenders will only be willing to agree a mortgage on properties valued above a certain level. Some stipulate valuations of £100,000 plus, while others will be happy with £40,000 or £50,000.
Property type – Some lenders are wary of properties that have an unusual construction. Properties like log cabins, period buildings or converted windmills could cause problems with mainstream lenders, but shop around because there will be a lender out there that is willing to offer you a mortgage.
Property portfolios – Buy-to-let lenders can restrict the number of properties you can have on one buy-to-let mortgage, while others might not like if you have multiple properties in the same area. Some lenders can also place a limit on the number of mortgages they are willing to agree with a single investor. However, there is a solution out there, it’s all about knowing where to look.
Age – If you’re looking to invest in a buy-to-let property to provide you with an income in retirement, by aware that some lenders will limit the mortgage term by age, so bear that in mind when searching for the right deal.
Can I afford a buy-to-let mortgage?
The affordability of a buy-to-let mortgage is not simply a case of balancing the rental income against the mortgage repayments. There are also a number of other costs of owning a buy-to-let property, and although almost all of these expenses are tax deductible, they are still costs you will have to pay in the first instance.
When considering the affordability of a buy-to-let mortgage, think about:
- Letting agent fees
- Maintenance costs
- Annual safety checks
- Buildings and landlord insurance
- Ground rents and service charges
- Repair work
- Property improvements
- And many more…
Although the lender may not take these additional costs into account, it’s essential you do.
Interest-only or repayment mortgage?
The decision about your buy-to-let mortgage repayment strategy should be aligned to your particular investment goals. If you’re looking to supplement a pension or perhaps build a small portfolio of properties, the repayment route will ensure that at the end of the mortgage’s term, the loan has been repaid so you’re not left with any nasty bills.
Interest-only mortgages are usually more popular amongst professional landlords with multiple properties. This allows them to continually expand their portfolio thanks to the greater level of cashflow the smaller repayments allow them to have. At the end of the mortgage’s term, the property can be sold to repay the initial sum.
How to find the right plan for you...
Different mortgage lenders have different terms, and we’re constantly working with the market to know what could be the most favourable deal in your particular circumstances. Your plan might work best with a fixed interest rate, or maybe a variable tracker. And of course we have to balance introductory rates and the arrangement fees. In the end, we will find the right fit.