Buy-To-Let Mortgages

More people than ever before are looking for buy-to-let mortgages. The buy-to-let boom is one big factor behind the rush to buy-to-let, with rental demand soaring UK-wide. For others, new pension freedoms (which give those over the age of 55 access to pensions which were previously locked away in an annuity) have freed up finances.

Whether you’re just starting out as a landlord and making your first foray into the buy-to-let market, or are expanding an existing property portfolio, it’s essential you find the right mortgage deal for you. Currently you have an excellent chance of achieving an impressive return on your buy-to-let investment thanks to three key factors:

  • A wide range of buy-to-let mortgage deals on the market at record low mortgage rates
  • Rents are at an all-time high
  • Property prices are on the rise.

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How to make the most of your buy-to-let investment

The first step in making a buy-to-let venture work for you is to find the best possible mortgage deal, which is why it’s so important to work with buy-to-let mortgage brokers who know precisely where to turn to find you the best deal.

Buy-to-let mortgages are very similar to conventional residential home loans, but there are a few key differences that our advisors can help you to get to grips with. For example:

  • Buy-to-let loans require a larger deposit (typically 25 percent) compared to regular loans, so the loan-to-value ratio is usually less.
  • You’ll need to show that the rental potential of the property will cover the interest repayments on the mortgage by at least 125 percent. This is to ensure that if the property stands empty or maintenance and repair work need to be done, you can still afford to make the repayments.
  • You may also need to set aside money to pay for the arrangement fees, which on a substantial buy-to-let mortgage can be as much as £2,000.

What are the benefits of buy-to-let?

The benefit of a buy-to-let property is that the investment returns can be two-fold. Not only is there the monthly income in the form of rental payments you will receive from your tenants, but there’s also the potential for a capital gain resulting from a rise in the property’s value over the course of your ownership.

In fact, given the low mortgage rates and high rental prices at present, the right investment could generate a gross yield annual yield of up to 12 percent, which is certainly more than any savings account will offer you!

Buy-to-let mortgages on existing properties

In some cases people want to let the home they currently live in to tenants, and buy another home to live in elsewhere. If you’re looking for BTL mortgages on existing properties, our advisors can work with you to help you effectively convert your current residential mortgage into what is effectively a let-to-buy mortgage. This will free you up to find a new residential mortgage on the property you wish to buy.

How can we help?

We work with a number of specialist buy-to-let mortgage brokers who know precisely where to look to find the most competitive deals on the market right now. Please complete our enquiry form with some details about the buy-to-let mortgage deal you’re looking for and an expert advisor will be in touch to offer a free, no-obligation initial consultation.

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