Buy To Let Mortgages
Expert Buy to Let Mortgages that we’re proud of
Investing in property and getting ‘buy to let mortgages’ are now more than ever a specialist sector.
With many ways to structure a deal, either in sole names, joint, through a limited company or an LLP, there is now more than ever a need to work with specialist buy to let mortgage brokers.
Get in touch and see how we can help or take a look at our FAQ’s below:
Do you have a question about a buy to let mortgages?
If you have a question about a buy to let mortgages that is not covered here, please contact us – we are here to help.
How much can I borrow on a buy to let mortgage?
The borrowing amount on a buy to let mortgage is driven primarily by the amount of rent the property will achieve.
There are other factors, but the rental income on a buy to let property is the principal driver to determine the amount that can be borrowed on buy to let mortgages.
Buy to let mortgage lenders can consider other income to help!
If the rental figure a property can achieve is not enough, some lenders can take into account outside income to help enhance the borrowing amount.
Examples might include, employed, self-employed or even pension income, which can then be assessed along with the rental figure to increase the overall buy to let mortgage.
An example of this is where a buy to let mortgage product allows borrowing up to 75% LTV (LTV means loan to value and is a percentage of the loan versus the value of the property). Still, the rent does not allow for this!
If the rent is not enough (based on their calculations) to achieve the full 75% LTV, then you’ll be restricted to the maximum the rental figure will allow.
In other words, even if the buy to let product, in theory, will enable you to borrow 75% LTV. If the rent is not enough, you might only be able to borrow 68% LTV.
The lender will, of course, look at many other areas to assess whether or not they will lend on a buy to let property.
To give you an idea how much you can borrow, try our buy-to-let mortgage calculators below.
Are Buy To Let Mortgages more expensive?
The short answer is yes, but it also depends!
If you compare the same borrowing amount (and value of a property) with a buy to let mortgage versus a residential one. A buy to let mortgage is (highly) likely to be more expensive.
Don’t forget. It’s a business and likely to be a higher risk for the lender, which means they will charge more for this.
When a Buy To Let Mortgage is cheaper!
Of course, you will get some residential mortgages which are more expensive, but this might be because the deposit is much less than the buy to let.
Remember the less deposit you put down, the higher the risk it is to the lender.
And if it’s a higher risk, it will be more expensive!
Conversely, the more deposit you put down, the lower the risk it is to the lender. And if it’s a lower risk, it will be cheaper!
Also, the more niche the type of lending you are looking for, the more expensive it is.
That’s because fewer lenders have an appetite to lend when it gets specialist or complex. It requires a lender to have a specialism to deal with these types of scenarios and an ability to weigh up the risk associated with it.
Buy To Let Mortgages – Factors that dictate pricing!
When it comes to mortgage pricing, several factors dictate it:
The type of mortgage (i.e. buy to let or residential).
Your persona type (first-time landlord or someone with experience).
The size of the deposit versus the value of the property.
The type of product you want (i.e. fixed or tracker).
All these factors (and many more) are used to price mortgages and will determine how much you pay.
How much deposit do I need for a buy to let mortgage?
Knowing how much deposit you need for a buy to let mortgage is a good first step! However, the size of the deposit for Buy to Let Mortgages can vary from lender to lender.
Like anything rules can change, but to give you a guide, the (minimum) typical buy to let deposit has always been about 25% of the purchase price.
Some lenders will allow as little as 15% or 20% deposits, but the less you put down, the more expensive the deal will be.
The deposit is only part of the story for buy to let mortgages
It’s essential to be aware that the buy to let deposit is only one part of the story.
The rental figure the property will achieve is also critical. If the rental amount is not high enough, then a more substantial deposit may be required.
Remember the amount you can borrow (and therefore the deposit you have to put down) is dictated in large part by the rental figure the property will achieve.
Try our minimum rent calculator to get an idea of how much you can borrow based on the rental figure.
Should you invest in Buy To Let?
Being honest, that’s not for us to say!
As independent mortgage brokers who are regualetd by the FCA we can only advise on the ‘mortgage world’!
However, let’s just say we have a lot of very successful property investors who are actively looking to grow their portfolios into 2020 and beyond.
Buy To Let Success:
The key like anything is to do your research and understand your market.
A helpful tool to research different areas, yields, prices and rental figures is Property Insights. It might be worth having a look on there!
Buy To Let Mortgages – Minimum Rent Calculator
Buy To Let Mortgages Calculator
Buy To Let Mortgages – Repayment Calculator
Buy To Let Mortgages – Guides
Service that’s about smiles not sales
We may be mortgage brokers, but we’re not a bunch of bankers! We are independent which means we only work for you. Our team are incentivised not on sales, but providing the best service for you.
- We assess
- You instruct us
- We research
- We find the best deal for you
Agreement In Principle
- You agree to the deal
- We submit the first stage of your application
- You get an agreement in principle
- We submit the second stage of your application
- We present your application in the best possible manner
- They assess your situation
- We support you throughout the process
- They assess your property
- You receive your mortgage offer
- Technically our job is done but we also like to help
- We liaise with solicitors and estate agents
- We keep you updated
- You achieve your goals