Buy To Let Mortgages

When buying a rental property, you will need to decide whether your investment objective is income or capital growth. Are you looking to cover the monthly costs and perhaps make a profit to supplement your income? Or, are you looking to make a profit later upon the sale of the property, with the assumption your property’s value will increase in value over time? The decision may affect the type of property you purchase, its location, and also the risk involved since there is no guarantee that property prices will rise.

Changes in taxation have resulted in many more landlords buying through a Limited company (specifically a Special Purpose vehicle known as an SPV). We can advise you on how these differ and how that may affect your decision on how to make the purchase.

Normally a lender’s decision about whether to offer a mortgage or not, will be based on the rental potential of the property as well as your own income, though in some cases, your income may not be considered at all.

Usually, a minimum of 20% to 30% of the property’s value is required as deposit and you can expect Buy to Let mortgages to have higher interest rates applicable to them. There is an additional 3% in Stamp Duty to pay if you are buying a second property whether as a home or for purpose of letting.

As well as mortgage costs, potential landlords should carefully consider the costs of owning the rental property itself.

Underwriting for these types of mortgages varies considerably from lender to lender. Please call us on 01483 266666 and speak with one our qualified advisers for expert advice that you can trust.

Some buy to let mortgages are not regulated by the Financial Conduct Authority.