A Buy To Let Mortgage is a mortgage taken out to buy a property that you intend to rent to tenants. The mortgage is secured on that property. This is usually done as a longer term investment with the aim to generate regular income from the rent and a capital gain when the property is sold in the future. Buy to let mortgages are financed differently to residential mortgage and lenders criteria is not always the same.

The buy-to-let market has come a long way since its inception in 1996. With the number of school leavers heading to university on the rise, immigration continuing at a steady rate and affordability issues preventing many from buying their own homes, demand for rental property remains keen.

Main points for a Buy to Let mortgage

1.       15% deposit is required by the lender, if you want to access the best rates a deposit of 25% or more will be required.

2.       You will need a good credit score, however there are some deals available to people with an impaired credit history.

3.       Rental income must be 125% of the monthly mortgage payment. In plain English if the mortgage is £100 a month, the monthly rental income must be £125 or more.

4.        First time buyer first time landlord scenario is available, however you will require a provable income of £25,000 per annum.

Buy to let mortgage as area available for employed people, self-employed, contractors and directors of limited companies. Some lenders are requesting a minimum income of £25,000 per annum. However we have access to lenders who require no income proof, as long as the property is cash flow positive.

Buy to let mortgage rates

Traditionally, buy-to-let mortgages were dominated by variable rate products, but as the market has grown lenders have diversified their offerings to include fixed rates, discounts, trackers and flexible-rate mortgages.

If you’re thinking about buy to let mortgages, whether it’s your first investment or you’re a seasoned private landlord, pick up the phone and talk to one of our mortgage brokers who will help you with the right product. Call 01202 512340 now, lines open 9am -7pm Monday to Saturday, or complete the contact us form to arrange for a mortgage broker to call.