Buy to Let Mortgages
What you need to know
A Buy to Let mortgage is a mortgage for people who wish to buy a property to rent.
The minimum deposit required to purchase a buy to let property is 20%
A buy to let mortgage is for people who wish to buy a property to rent. A residential mortgage is for people who wish to buy a property to live in
What is ‘Buy To Let’?
A Buy to Let mortgage is a mortgage for people who wish to buy a property to rent.
The minimum deposit required to purchase a buy to let property is 20%
A Let To Buy mortgage is for someone who currently owns and lives in a property with a residential mortgage on it who wants to remortgage that property into a Buy To Let to raise money for a deposit to purchase a new residential property.
A portfolio landlord is someone who owns 4 buy to let properties or more.
The affordability assessment for Portfolio landlords is more difficult with lenders because they will assess your portfolio as well as the property you are looking to mortgage.
- Let to Buy
- Limited Company
- Consumer Buy to Let
- Buy To Let.
A buy to let mortgage is for people who wish to buy a property to rent. A residential mortgage is for people who wish to buy a property to live in.
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We know it gets confusing!
That is exactly why we’re here to explain your options and how to make it work for you!
....so, in a nutshell...
Buy to let mortgages are specifically designed for those who aim to earn income from a property
Let To Buy
A Let To Buy mortgage is for someone who currently owns and lives in a property with a residential mortgage on it who wants to remortgage that property into a Buy To Let to raise money for a deposit to purchase a new residential property.
Buy To Let
A Buy To Let mortgage is for people who are looking to remortgage their current rental property or purchase a property to rent out. The property would be owned in the owners personal name.
Limited Company Buy To Let
Limited Company SPV mortgages are for people who have set up a Limited Company purely for buying, selling and letting property.
Consumer Buy To Let
This is a type of Buy To Let mortgage where the landlord or their family have ever lived in the property they are looking to mortgage. This is not to be confused with a Let To Buy mortgage.
Our role is to help you make an informed decision
There are many aspects to all types of mortgage and we understand that you need to make the best decision.
You will undoubtedly have many more questions, so please feel comfortable enough to arrange a free, no-obligation chat!
Frequently Asked Questions
Here are a few of the questions we regularly answer for those who are wondering if this is the correct choice.
Just remember, we’re ready to chat and answer many more!
Here are a few of the questions we regularly answer for those who are wondering if this is the correct choice.
A buy to let mortgage is a mortgage for people who wish to rent out a property. A residential mortgage is for people who wish to live in that property.
It really depends on you and your circumstances. A fixed rate ensures that your monthly payments will remain the same for an agreed period of time, which maintains stability.
But there are advantactes to variable rates.
Speaking with one of our advisors would really help you decide on the best course of action.
Its all to do with the Terms and Conditions of the mortgage. The lender will not allow you to live in a property which has a Buy To Let mortgage on it. If you have a residential mortgage on a property you will not be able to rent it out to someone unless you gain permission form the mortgage lender first. This is called permission to let.
Deposits required for a buy to let mortgage can be as low as 20% of the overall purchase price or value of the property. However, such terms are only available from a few lenders. If you can stretch to a 25% deposit, then the number of lenders you can use opens up the whole market. Finally, first-time buy-to-let buyers are required to provide a 25% deposit.
There are many interest rates for Buy To Let mortgages. Much the same as for residential mortgage you can have fixed rates, Tracker rates discounted variable rates to name a few.
A buy to let mortgage is a mortgage for people who wish to rent out a property. A residential mortgage is for people who wish to live in that property.
It really depends on you and your circumstances. A fixed rate ensures that your monthly payments will remain the same for an agreed period of time, which maintains stability.
But there are advantactes to variable rates.
Speaking with one of our advisors would really help you decide on the best course of action.
Its all to do with the Terms and Conditions of the mortgage. The lender will not allow you to live in a property which has a Buy To Let mortgage on it. If you have a residential mortgage on a property you will not be able to rent it out to someone unless you gain permission form the mortgage lender first. This is called permission to let.
Deposits required for a buy to let mortgage can be as low as 20% of the overall purchase price or value of the property. However, such terms are only available from a few lenders.
If you can stretch to a 25% deposit, then the number of lenders you can use opens up the whole market. Finally, first-time buy-to-let buyers are required to provide a 25% deposit.
There are many interest rates for Buy To Let mortgages. Much the same as for residential mortgage you can have fixed rates, Tracker rates discounted variable rates to name a few.
What is a buy-to-let mortgage?
A buy-to-let mortgage is purely for people who wish to buy a property that they can let out rather than live in.
Do I need to pay a larger deposit for a buy-to-let mortgage compared to other mortgages?
Yes. Deposits for buy-to-let mortgages start from 20%. Finding rates is not easy though so it may pay to speak to our team at Mortgage Saving Experts to help you find the best deal. You may even find deposits of as much as 40% being requested!
How long does it take to get a buy-to-let mortgage?
Much like all other mortgages, it is not necessarily a fast process. You’ll need to prove you have the rental income to cover the mortgage payments, pass affordability checks and have the lender carry out all their due diligence. This can see the whole process takes a few months to complete.
What are the interest rates on buy to let mortgages?
The interest rates for buy-to-let mortgages will vary per lender but are often higher than the standard residential mortgages. This is due to the extra risk put upon the lender. In many cases, these mortgages are also interest only. This means you only pay back the interest each month then settle the capital debt at the end of the term.
Are there specific requirements to get a buy-to-let mortgage?
Yes. You can only apply for a buy to let mortgage if you are letting out the property. In addition, you must show that your rental income will cover at least 125% of the total mortgage value but can be as high as 165%of the rental income at a stressed interest rate to obtain the mortgage you need. This of course depends on your circumstances. You will also need to show you meet the minimum income requirements, already be a homeowner, demonstrate a good credit history, and in some cases, be over 25 but under 75 years of age. Every lender has its own criteria and you can even potentially purchase a Buy To Let property if you are a First Time Buyer.
Can I get a buy to let mortgage with a bad credit history?
You could but your borrowing options may be limited. Furthermore, you may find that interest rates and deposit amounts are significantly higher than they would be if you had a good credit score. We can help you source the most affordable options thanks to our comprehensive connections in the mortgage space.
Could I live in the property if I have a buy-to-let mortgage?
No. These mortgages are strictly to let the property out. If it was found that you were living in the home as your main residence, you would be in breach of the mortgage terms and could face costly penalties.
I’m a first-time buyer, can I get a buy to let mortgage?
You can but it can often be tough. You may find that the lending criteria are quite strict and require you to fit an affordability assessment for you to be eligible. Our team will be able to advise on the options available to you as a first-time buyer.
Can I change from my residential mortgage to a buy to let mortgage?
You can, if you decide you wish to rent out your home rather than live there. This is called a Let to Buy and not all Buy to Let lenders offer this and its called a Consumer Buy To Let which means you or your family have lived in the property you are mortgaging. You will need advice on this matter from an experienced adviser.
Are there different buy to let mortgage products?
Yes. The buy-to-let market appeals to individuals as well as businesses. As a result, there are limited company buy-to-let mortgages, standard buy-to-let and more available. Speak to our team to find out which type of mortgage may suit your property plans best.
How long does a buy-to-let mortgage last?
A buy-to-let mortgage normally lasts as long as a standard residential mortgage. They are typically set for 25 years but it is possible to find buy-to-let mortgage products with terms ranging from 5-30 years.
Are buy-to-let mortgages interest only?
In many cases yes. This means you’ll need a plan in place to show how you pay back the capital loan at the end of the term. It is possible to find buy-to-let products that are not interest only, and we can help you do just that!
Can Mortgage Saving Experts help me find a buy-to-let mortgage?
Of course! It is what we do! Our experienced team of mortgage experts can help you navigate the mortgage minefield and find you a deal suitable for the property you wish to buy.
We can even help with equity release, first time buyer mortgages and those complex mortgages that can be a little harder to obtain. Contact us today to find out more.
Are Mortgage Saving Experts fully regulated?
Yes. We take our role as mortgage brokers very seriously and are fully authorised and regulated by the FCA. Our FCA number is 779662,however many Buy To Let mortgages are not regulated by the Financial Conduct Authority.
