Buy to Let Mortgages

Last updated: May 16th, 2022
  • Buy to Let Specialists
  • Exclusive Rates
  • 5 Star Reviews
  • Personal Service

Buy to Let Mortgages

Last updated: May 16th, 2022
  • Buy to Let Specialists
  • Exclusive Rates
  • 5 Star Reviews
  • Personal Service

What is a Buy-to-Let Mortgage?

A Buy-to-Let Mortgage is a mortgage secured on a property that has been or is being purchased for the sole reason of being let out to tenants. In the past, owning a Buy-to-Let property was seemingly reserved for professional landlords, but now landlords come from all walks of life and varying professions.

Set up costs and product rates are different to a standard Residential Mortgage, as is the criteria on which a lender assesses an application. It’s typically based on personal circumstances and what a lender will deem as the open market rent that may be achieved from letting the property.

Just Mortgage Brokers has access to over 12,000 mortgages from over 90 lenders, often offering exclusive deals otherwise unavailable on the high street. You may find our blog post The Advantages and Disadvantages of a Buy-to-Let Mortgage useful, or you can get in touch with one of our specialist advisers to see how they can help.

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An introduction to Buy to Let Mortgages

Buy To Let Mortgages

With the right Mortgage Broker or Adviser, it has never been easier to access a Buy-to-Let Mortgage. Whether you are a First Time Landlord, Portfolio Landlord, or someone that wants to own a Home in Multiple Occupation (HMO), lenders will most certainly have options available. However, it can still be tricky and getting the right mortgage advice is as important as finding the right property.

Our specialist Mortgage Brokers can go through the process and tailor their advice to your circumstances. So, whether you’re just starting out on your Buy-to-Let journey or you’re a seasoned investor, get in touch with us at Just Mortgage Brokers to see how we can help.

This really depends on how risk averse a landlord is. While a Fixed Rate allows you to know exactly what you pay monthly, it often carries a slightly higher rate than a Tracker Rate. You will however be protected from any rate rises made to the Bank of England base rate.

A Tracker Rate will often be cheaper than a Fixed Rate. However, consider that your monthly repayment will fluctuate according to the Bank of England base rate, whether this goes up or down.

While it is recommended that you save a minimum 15% deposit for a Buy-to-Let Mortgage, the answer to this question is more detailed.

Some lenders will consider a Buy-to-Let Mortgage with a 15% deposit, but they are likely to use strict lending criteria. That’s why a higher minimum of 25% is more appropriate in many circumstances.

When assessing how much you can borrow for a Buy-to-Let Mortgage, a critical element is the property’s rent value. This may override any minimum deposit requirement.

For example, for a property valued at £250,000 a lender using the criteria of a minimum 25% deposit would equate to £62,500, leaving a required mortgage of £187,500. However, if the rentable value of the property meant the lender would only provide a mortgage up to £162,500, a 35% deposit would be required to proceed.

Some lenders now consider overall affordability where other income such as salary can be factored into the Buy-to-Let calculation and can be used to cover any shortfall the rent may give regarding the loan amount. This is commonly referred to as ‘top slicing’.

Buy-to-Let Mortgages are designed for borrowers purchasing or remortgaging a residential investment property who already occupy their own home, with or without a mortgage.

It may be more difficult to get a Buy-to-Let Mortgage as a First Time Buyer but it is by no means impossible. A lender would normally expect you to be able to afford the loan on a residential basis.

Mortgages are available to Limited Companies that are specifically created for the purpose of owning and renting property. These Limited Company Buy-to-Let products may be suitable for some borrowers more than others and it is very important that you understand the main differences. Good advice from a suitably qualified accountant or tax specialist will help with this decision.

Building Societies and Banks have defined eligibility requirements for this type of mortgage although they may vary greatly from lender to lender.

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