Buy to Let Mortgages

If you are looking to buy a property for the purposes of earning a rental income, it is worth looking for a lender that specialises in buy to let mortgages, since the mortgage product will usually be more tailored to your requirements. As with residential mortgage lending in the current climate, buy to let mortgages cannot usually be obtained unless you have a sizeable deposit, typically 25 per cent or more, and a reasonable credit history. If you do not fit these criteria, any products for which you are eligible will incur higher interest rates.

Your eligibility for buy to let mortgages can either be assessed on your current salary (or joint salary if you are applying for a joint mortgage), or on the rental income of the property, or a combination of the two. If this applies, the rental income must be set as a percentage of the total monthly mortgage payments, typically more than 100% of the payment. Since the property market crash, buy to let mortgages are harder to obtain due to the number of lenders that have withdrawn their products. Products that do come onto the market tend to be fully subscribed within weeks. Therefore it is important to remain vigilant, keep an eye on the market at all times, and act quickly if you find a good deal.

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Buy to Let Mortgages: The Facts

• Traditionally, the buy-to-let mortgage market were dominated by variable rate products, but as the economic climate became steadily more uncertain, more and more landlords have opted for fixed rate products to enable a greater degree of financial security.
• The days of 100% LTV buy to let mortgages are gone, at least for the time being.  You will need a deposit of anywhere between 25 and 40 per cent of the value of the property before you will get competitive interest rates, as well as an exemplary credit rating.
• Your loan will be calculated according to your salary and the potential rental income of the property.