Buy To Let
CHOOSING THE RIGHT MORTGAGE IS ESSENTIAL
Whether you are investing in buy to let properties for the potential income or for the potential capital appreciation, choosing the right mortgage is essential.
How does a buy to let mortgage differ from a regular mortgage?
Put simply, business buy to let mortgages are for properties you purchase with the intention of renting them out to a third party. Consumer buy to let mortgages are for 'accidental landlords', Portfolio Landlords are Landlords who will have 4 or more properties once the latest application has completed and Ltd Company Buy to Lets. All 4 types of buy to let mortgages differ from traditional mortgages in that:
Interest rates are typically 1-2% higher for a Buy to Let Mortgage:
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.
Portfolio Landlord applications
These are different as the lender will ‘stress test’ the case over the full portfolio using different interest rates and multiples to establish if the full portfolio is protected against interest rate rises and other factors
Ltd. Company Buy to Lets
If you are a higher rate tax payer you may consider a Ltd. Company Buy to let application. These are usually typically offered at an even higher rate of interest due to the higher lending risk
You May be eligible for a range of tax deductibles:
These could include:
Mortgage interest payments
Be sure to contact a tax expert to see the full list for your situation.
How Can Money Brain Help?
We save you the hassle
Our highly trained, professional advisers work with you every step of the way to make the mortgage process simple, saving you time and effort on one of life’s biggest decisions.
We offer a comprehensive Range of First and Second charge mortgages
Going to a bank or estate agent limits your options and leaves you at risk of getting a bad deal. We have access to hundreds of products across the whole mortgage market and can find you the ideal product for your needs.
We can save you money
By searching for a competitive mortgage we can potentially save you £1,000s throughout the term of your mortgage.