What is a buy to let mortgage?

If you are not living in the property and you are renting it to someone else or if you are purchasing an investment property for this purpose, you need a buy to let mortgage. The deposit that you will require is higher, and rates are also slightly higher than residential mortgages.

How much will I need to purchase a  buy to let property?

A typical deposit of 25% is required for a buy to let purchase. This would give you access to most  lenders and competitive rates, subject to criteria. Few lenders may be offering lower deposit buy to let mortgages at the time, but your rates and fees may be higher. Our advisers will be able to highlight all of the options that are available to you.

What are the extra costs involved when buying and renting out a buy to let property?

Stamp duty (higher stamp duty on additional properties)

Tax on rental income earnt (obtain advice from an accountant regarding this)

Landlord insurance

Letting agent fees (if you use a letting agent)

Maintenance on the property

Licence fees (may be present in certain areas)

How do lenders work out how much they will be able to lend me?

If you are living in the property, lenders will use your income to work out the loan that they can lend you. If you are going to be renting out the property, most lenders use the rental income of that property to work out the loan that they can lend you. There are a few lenders that will also use your salary to ‘top up’ the loan. Our advisers will be able to recommend the best option suited to your requirements.

Can I get a buy to let mortgage as a first time buyer?

Yes – but your options will be limited. Most lenders require you to own your own residential property, before you invest in a buy to let property.

Types

Individual

Remortgaging

Portfolio

Limited company

HMO