Buy-to-Let mortgages are for landlords purchasing a property to be rented out. We can help those who are already experienced landlords looking to expand their portfolio or those who are looking to purchase their first BTL property. The process isn't too dissimilar to that of a standard mortgage however there are some differences to be aware of.
Most BTL mortgages are interest-only products whereby you pay the interest each month but none of the capital. At the end of the mortgage term you will need to pay off the capital in full, usually via the sale of the property. There are some repayment mortgages available on BTL terms.
Different to a standard mortgage, the amount you are able to borrow on a BTL mortgage is usually based on the expected rental income of the property. On average, lenders will want the monthly rental value to be at least 125% of the mortgage payment. You will also need to meet the lenders minimum salary requirements to qualify for the mortgage, these will vary from lender to lender.
Lenders view mortgages for BTL properties as higher risk compared to standard residential mortgages and this is reflected in the products available. You'll likely need a larger deposit (at least 20% of the property value) and the rates will generally be higher in comparison to the residential products on offer.
No, buy to let mortgages are specifically for landlords purchasing a property to let. You may be able to move into the property in the future, but you would need to change the mortgage type to residential.
Lenders will all have their own criteria but generally lenders will require that you already own your own home before becoming a landlord. There may also be a minimum income requirement, most commonly this is a minimum of £25,000 from a source other than rental income.
Yes, you will be taxed in line with your personal income tax liabilities on any rental income. We recommend speaking with an accountant before purchasing your first property to better understand the tax implications.
Ready to chat through your BTL options? We're here to help. We'll cover all the costs of an initial consultation, research, illustration and obtain an Agreement in Principle for you. No obligation to proceed with our recommendations.
Your home may be repossessed if you do not keep up repayments on your mortgage.
The Financial Conduct Authority does not regulate all Buy to Let mortgages
The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.
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