Buy To Let Mortgages

Buy to let mortgages are usually secured against the property you are buying to rent, but it can be against your own home. In general, if you can raise the deposit required on the property and show that the rental income will be between 125% to 130% of the monthly mortgage interest payments, then getting a buy-to-let mortgage should be fairly straightforward. The risk to the lender is reduced and contained because they will have a charge on your property. Some companies may lend at 110% or even 100% of rental income but you would have to pay a premium. The obvious risks for you are periods of no rental income, increasing rates, letting or management fees.

Where property prices have risen or where high rentals have been achieved, buy to let investments have been very profitable. In less buoyant times, lenders usually have good deals to tempt investors into the market. With an interest-only mortgage you will make payments to the lender of interest on the loan and generally, a single lump sum to cover the capital at the end of the term (period of the loan). To reduce the lump sum needed to settle the loan you can make interim payments. With a repayment type buy-to-let mortgage you will be paying both capital and interest in regular monthly payments. This means that when you come to selling the property, some of the capital will have already been paid off, or if all repayments have been made, the loan will be completely paid off at the end of the mortgage. Save time and find the right deal online.