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Maximise your investment with the right Buy-To-Let Mortgage

What’s different about Buy-To-Let Mortgages

Buy-to-let (BTL) mortgages are generally for landlords or investors who are looking to buy a property and rent it out. The lending criteria and approach adopted by the banks will differ from the market offerings you see with regular residential mortgages.

Interest Rate
Buy-To-Let mortgages have higher interest rates due to a perceived higher lending risk
Interest-Only Options
BTL mortgages can be provided on an interest-only basis. This means you pay the interest each month, but not the capital amount. At the end of the mortgage term, you repay the original loan in full. BTL mortgages are also available on a repayment basis.
Larger Deposit
Typically a minimum of 25-30% of the property's value is required up front as a deposit.
Smaller Pool of Lenders
A number of lenders will not offer Buy-To-Let Mortgages so you are best served to speak to a Mortgage Broker who can advise you on your options
Rental Income
The decision as to whether or not a mortgage will be offered is usually based on the rent to be earned from the property as well as your own independent income. In some cases, your personal income is not even considered, the lender will just seek clarity that the rental repayments will cover the loan

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How much can you borrow for Buy-To-Let mortgages?

The maximum you can borrow is linked to the amount of rental income you are projecting from the property. Lenders will also need the rental income to be 25–30% higher than your mortgage payment

Your lender will want to be sure the income from the property will cover the mortgage payments, plus a bit extra to cover unforeseen costs

If the rental valuation of the property is not high enough, the loan to value (LTV) the lender requires might be impacted, meaning you would need a larger deposit

A good way to find out what your rent might be, would talk to local letting agents, or check rental listings online to find out how much similar properties are rented for

Lenders' Conditions for Buy-To-Let Mortgages

Lender may require you meet some conditions before approving a loan. These conditions may include some or all of these items

Don't worry if you can't satisfy these conditions. Drop us a line and we'll see how we can to help you

You own your home
The lender may make it a condition that you already own your own home, whether outright or with an outstanding mortgage
Good credit record
You will need a good credit record and not stretched too much on your other borrowings, for example, credit cards
Evidence of regular income
You will need to provide evidence of employment income or earnings from self-employment separate from rental earnings
At least 25% deposit
You will need a minimum deposit of 25% of the property value. However we’re seeing more and more lenders look for a minimum 30% deposit for a buy-to-let mortgage
An emergency fund
Borrowers should have a minimum surplus of 6 months of mortgage repayments available after all associated property costs are paid
Confirmation of rental income
The lender will also seek independent verification from an estate agent to verify and validate the targeted rental income to support the mortgage.