How to Find a Buy to Let Mortgage

If you are shopping for a buy to let mortgage, you are not alone! Buy to Let Mortgages are widely popular in the UK housing market. Approximately 10% of all mortgages taken out in 2006 were to buy property to rent out. With a growing population, steady divorce rates, and a large population of students, there is constant demand for rentals. If you have done your research, buy to let mortgages can be a sound investment. There are specific mortgage types for buy to let mortgages, and if you are an investor you will want to have the knowledge on hand before discussing a quote with a lender.

The purpose of this article is to increase you knowledge about shopping for a buy to let mortgage. We will go over the basics of buy to let mortgages, deposit requirements, and where to find a buy to let mortgage lender.  

Are there good deals to be found?

Yes. Because buy to let mortgages are increasingly common, lenders offer competitive mortgages specially designed for landlords.

Types of Buy to Let Mortgages

Historically, the only type of buy to let mortgages required variable interest rates. Fluctuations in the market could rise or lower monthly payments. Most property owners appreciate knowing how much their mortgage payment is every month because it affects how much the landlord should charge per rental. Variable interest rate mortgages can provide a teaser APR initially and then depending upon the market, it can rise and fall. It is a gamble, but you might be able to pay less than a higher fixed rate. Luckily variable rates are in the past, and nowadays, you can find buy to let mortgages with fixed rates, flexible rates, and interest only payment plans. By understanding buy to let mortgage basics, an investor can determine which one fits their property investment plan.

If you are shopping for a buy to let mortgage, the interest rate and type of mortgage is instrumental in calculating the overall cost of your loan. The difference between a fixed rate and variable one could be thousands of pounds, so do you homework and make a sound decision about which type is a better investment for you.

What is an Interest Only Mortgage?

An interest only mortgage can be paired with either fixed or variable rate just like a regular buy to let mortgage.