Buy to Let

Buy to Let

These are mortgages specifically available for borrowers to aid them to purchase investment properties. The anticipated rental income is primarily used to asses the amount that can be borrowed and the calculation used by different lenders varies.

Usually the lender prefers

  • the borrower to already own their own home (with or without a mortgage)
  • to earn over a set amount per annum e.g. £25000
  • to have a good credit history
  • for the rent to cover the proposed mortgage interest using a rental calculation for example £mortgage amount x arbitrary interest rate x 125% = minimum annual rent

Lenders offer different schemes in a similar way to residential mortgages, they tend to have either higher pay rates or higher set up costs (sometimes both!)

In terms of the repayment method they will allow Pure Interest Only as well as full repayment too, being more relaxed about the manner in which the mortgage is repaid as it is not your main residence. Also Buy to Let mortgages are not currently (Nov 2015) regulated by the Financial Conduct Authority (although this could of course change in the future).

Purchasing any property is a big commitment, buying one to let out to tenants has additional aspects that need to be fully considered. We have a wealth of experience in arranging Buy to Let mortgages (and own several ourselves) so can give you pointers as to how they work and what other areas you need to consider i.e. record keeping for tax purposes, dealing with letting agents etc.

Please call us and we will talk through the options with you.