A Buy to Let mortgage is a mortgage on a property that will be rented out. lenders have different criteria for these types of mortgages, so you need to consult an experienced mortgage adviser with whole of market access who can give you the most current information. At Elm Tree Financial Services we think booking an appointment with an adviser can help put your mind at rest when it comes to the complex market that is Buy to Lets. 

 

Most Buy to Let mortgages are interest only which means only the interest is paid and the capital remains the same without the mortgage term. The repayment vehicle is often the sale of the property. 

 

Interest rates on Buy to Let mortgages tend to be higher then residential loans. 

 

Lenders require bigger deposits, usually in the region of 25% A 30% - 40% deposit will secure access to the lowest interest rates. 

 

With a Buy to Let mortgage the amount you can borrow is based on the earning potential and profitability of the property, (I.e the rental income) as well as your normal earned income.  The rent must be more then the mortgage amount and you must meet the lenders affordability. lenders will also use stressed check that your rental income will cover monthly mortgage payments in different scenarios. Not all lenders use the same formula and some will lend more generously. 

 

Call Elm Tree Financial Services to talk about your options and what you need to do when moving forward. 

 

There are two ways that you can seek to make a return on your investment : capital growth and rental income. As with any investment, purchasing an investment property does carry risks so it is important to seek expert advice.