Financial Experts

How does a buy to let differ from a regular mortgage

Interest rates are 1-2% higher

The minimum deposit is 15% of loan value

This is because Lenders view a property that you are not going to personally live in as a greater risk. Tenants do not have the same incentives as an owner occupier to look after the property and there may be times when the rental income does not cover the mortgage payments.

The minimum deposit is 15% of loan value

While for a residential mortgage it is possible to pay as little as 5% deposit (so £10,000 deposit on a £200,000 mortgage), Lenders like you to have a larger personal stake in a buy to let property as it reduces their risk whilst also giving them more chance of recouping their debt should they have to repossess the property.

Lenders may also impose other restrictions or conditions on applications for a buy-to-let mortgage such as a minimum age, being an existing home owner and/or being resident in the UK. The property will need to be in a condition to be let and there may be restrictions on the number of bedrooms, number of floors or number of units in a block. HMO’s (Houses in Multiple Occupation) also have different rules and have separate criteria to standard residential buy to lets, and may or may not be subject to licencing by the local authority.

The rental income generated by the property is also taken into consideration, and can affect the amount of money a lender is prepared to offer you. Typically the rent needs to cover 125% of the monthly mortgage payment (so if the mortgage payment is £500 a month, the rent must be at least £625 a month) , which is usually calculated on a notional interest rate of 5%. However, there are a number of variations on this, and it’s important to discuss this up front, if you’re looking to maximise your borrowing potential.

However, do be aware that it is considered “mortgage fraud” to either let a property while only paying for a residential mortgage, or to move into a property that you have told the lender you are renting out. Make sure you are upfront with your broker / lender about your plans during the application process.

Financial Expert has access to the whole of market and is experienced in finding the most suitable mortgage product for less conventional situations. Also with the upcoming changes to buy to let / let to buy, it’s never been more essential to get the right advice. Please call one of our expert advisers and we will be happy to assess your unique needs. However, do be aware that it is considered “mortgage fraud” to either let a property while only paying for a residential mortgage, or to move into a property that you have told the lender you are renting out. Make sure you are upfront with your broker / lender about your plans during the application process.

MORTGAGE CALCULATOR

These figures represent the range of loan sizes, monthly payments and rental incomes you can expect to find on the market, from a range of different rates available (subject to availability and meeting lender’s criteria). For a more specific quote tailored to your situation, please give us a call.

Our buy-to-let mortgages table shows a selection of deals available to give you an indication of cost, but there’s more to mortgages than the headline rate. To make sure you’re looking at mortgages that suit your individual circumstances, talk to one of our experts.

If you have any questions please get in contact with us

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT.

Best Brokers is a trading style of Financial Expert Mortgages Ltd which Is appointed representative of Financial Expert Partnership Ltd which Is Authorised And Regulated By The Financial Conduct Authority. Best Brokers and Financial Expert Mortgages Ltd act as a credit broker not a lender.

BUY TO LET

CHOOSING THE RIGHT MORTGAGE IS ESSENTIAL

How does a buy to let differ from a regular mortgage

Interest rates are 1-2% higher

The minimum deposit is 15% of loan value

The minimum deposit is 15% of loan value

The minimum deposit is 15% of loan value

The minimum deposit is 15% of loan value

The minimum deposit is 15% of loan value

You are eligible for a range of tax deductibles?

These could include:

Can I still get a buy to let mortgage if I…

…don’t own a residential property?

…want to rent out the property I own and mortgage a new one?

am retired or am entering retirement?

…already have mortgages on other properties?

…intend to buy as a Limited Company?

…plan to build the property myself?

…don’t have a regular earned income?

…don’t live in the UK?

... possibly, yes!

MORTGAGE CALCULATOR

BUY TO LET

CHOOSING THE RIGHT MORTGAGE IS ESSENTIAL

How does a buy to let differ from a regular mortgage

Interest rates are 1-2% higher

The minimum deposit is 15% of loan value

The minimum deposit is 15% of loan value

The minimum deposit is 15% of loan value

The minimum deposit is 15% of loan value

The minimum deposit is 15% of loan value

You are eligible for a range of tax deductibles?

These could include:

Can I still get a buy to let mortgage if I…

…don’t own a residential property?

…want to rent out the property I own and mortgage a new one?

am retired or am entering retirement?

…already have mortgages on other properties?

…intend to buy as a Limited Company?

…plan to build the property myself?

…don’t have a regular earned income?

…don’t live in the UK?

... possibly, yes!

MORTGAGE CALCULATOR

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