Buying a property as an investment is a big decision, and most people will need a buy to let mortgage to help them with their purchase. So you can understand how it works, we've put together a selection of useful guides and calculators all based around helping you find the best buy to let mortgage. Once you're ready to discuss your buy to let mortgage requirements, our expert mortgage advisers are on hand to help you 7 days a week. No need to make an appointment – our award-winning, fee free mortgage advice is just a phone call away.
The subject of mortgages can feel complicated enough as it is. Trying to arrange one by yourself whilst juggling all your everyday demands can even feel rather daunting!
We also understand that there may be lots of questions you may have or things you feel you want to know more about.
We are here to help you and are happy to give you expert, fee-free advice at all stages of the journey – whether you’re remortgaging, buying a new home or have a rental property.
And, in the meantime, if you’d rather do a little self-learning, or there’s a question we can answer right here, we’ve also put together a range of mortgage guides for you to read if you have a spare 10 minutes. If there’s something you need to know which we haven’t covered in our guides, then just let us know! We’ll either create a new guide for you or help you direct via email or phone.
Getting the right Buy to Let mortgage deal
Buy to Let mortgages are designed for people who want to buy a property and rent it out rather than live in it themselves.
Despite changes which restrict Buy to Let tax relief for landlords, and a stamp duty surcharge on Buy to Let properties, many people still see renting out property as an attractive way to generate an income. Current low interest rates mean that there are plenty of competitive Buy to Let mortgage deals to choose from.
You can’t apply for a standard residential mortgage on a property that you let out as a landlord. If you already have a residential mortgage on the property you want to let out you should talk to your lender about switching to a landlord mortgage, or seek advice from a Buy to Let mortgage broker if you are buying a new property to let out.
Here, we explain everything you need to help you find the best deal.
Getting the right Buy to Let mortgage deal
Buy to Let mortgages are designed for people who want to buy a property and rent it out rather than live in it themselves.
Despite changes which restrict Buy to Let tax relief for landlords, and a stamp duty surcharge on Buy to Let properties, many people still see renting out property as an attractive way to generate an income. Current low interest rates mean that there are plenty of competitive Buy to Let mortgage deals to choose from.
You can’t apply for a standard residential mortgage on a property that you let out as a landlord. If you already have a residential mortgage on the property you want to let out you should talk to your lender about switching to a landlord mortgage, or seek advice from a Buy to Let mortgage broker if you are buying a new property to let out.
Here, we explain everything you need to help you find the best deal.
In this guide
In this guide
Ever North Mortgages Can Help You to Get Your Buy to Let Mortgage
If you are thinking of getting a Buy to Let mortgage and just want to talk to an adviser, please give us a call or an email. One of our mortgage advisers will be happy to speak to you to discuss your options. Speaking to us does not mean that you have to use our services, although our services are completely FREE.
Ever North Mortgages Limited is authorised and regulated by the Financial Conduct Authority (FCA), but the FCA does not regulate most Buy to Let mortgages.
Who can get a Buy to Let mortgage?
As well as checking your rental income is sufficient, lenders will have other criteria you need to meet before they’ll offer you a Buy to Let mortgage. Buy to Let mortgages can be more risky for lenders so they tend to have stricter eligibility requirements than for residential mortgages.
- Many lenders have a minimum income requirement, which is often £25,000 a year
- You must typically be over the age of 21
- Some lenders will also impose upper age limits too. They may require, for example, that you will be no older than 85 at the end of the mortgage term
- It’s possible to get a Buy to Let mortgage if you’re a first time buyer landlord, but your mortgage choices are likely to be restricted. Lenders will usually prefer you to be a homeowner.
WHAT ARE BUY TO LET MORTGAGES?
A buy to let mortgage is the type of mortgage deal you will need if you want to buy a property and rent it out instead of living in it yourself.
Buy to Let mortgages are similar to standard mortgages, but they need a larger deposit and a tenant in the property. If you do not have a tenant, then you will need to prove to the lender that your property is suitable to rent out. Usually lenders require the rental income to be between 125-145% of the monthly mortgage payments. Many lenders will also want to see evidence of your income other than the rental income you are getting.
Finding the Perfect Buy to Let Property
Before you apply for your Buy to Let mortgage, the first step is to find a property.
If this is your first investment property, then it would be wise to do some research before you start hunting for a house.
The 2 main things you should consider when you begin your property search are your budget and your location. Pick a location where the rental market is good, so that you will not suffer from vacant periods. Once you have zeroed in on your ideal location, look for properties within your budget. Often it is a good idea to look at estate agents’ website to get an idea of what is available in your chosen area.
Another thing to keep in mind is your location relative to your property’s. Choosing an area for your Buy to Let property which is far away from you is not a smart choice, as it will mean many long travels between your home and property if you need to do inspections or repairs. Having your buy to let property nearby will make life easier.
You can use the services of letting agents to rent out and maintain your Buy to Let property, but remember that you will need to pay them a fee, which will eat into your profits. Alternatively, you can use the ‘tenant finding’ services of a letting agent, where they will find a suitable tenant for you and take a one-off fee. The service usually includes advertising your property, vetting the tenants, setting up the contract and making an inventory.
Getting a buy to let mortgage with a broker
While you could go directly to lenders for a Buy to Let mortgage, usually the best deals are available to the brokers. Lenders do not offer all deals to individuals. To that end, you could get a really lucrative Buy to Let mortgage deal if you made your application through a broker.
At Ever North Mortgages, we are experts at arranging Buy to Let mortgages and we don’t charge you a fee. We will get you the best deal that suits your unique financial circumstances. And the best part is that our services are completely free.
The Buy to Let mortgage process explained in a few simple stages
- Save up a deposit for your Buy to Let property mortgage.
- Decide on a budget for the purchase of your property.
- Choose your property in the area of your choice.
- Use the calculator hereto calculate how much rent you should charge.
- Compare the best buy to let mortgage deals that you may qualify for here
- Call or email us to speak to a mortgage adviser for FREE.
- Discuss possible options with our expert and if you do decide to use our services, let us do all the hard work to get you your Buy to Let mortgage!
ALL YOU NEED TO KNOW ABOUT BUY TO LET MORTGAGES
A A buy to let mortgage is the type of mortgage deal you will need if you want to buy a property and rent it out instead of living in it yourself.
Buy to Let mortgages are similar to standard mortgages, but they need a larger deposit and a tenant in the property. If you do not have a tenant, then you will need to prove to the lender that your property is suitable to rent out. Usually lenders require the rental income to be between 125-145% of the monthly mortgage payments. Many lenders will also want to see evidence of your employment/self-employment.
A The size of your mortgage loan will depend on the size of your deposit and how much you are renting your property out for. The easiest way to find out how much you can borrow on a buy to let mortgage is to use our Buy to Let mortgage calculator. All you have to do is put in some information and the calculator will do the rest. You will get a fairly accurate estimate of how much you can borrow from a lender.
The amount you can borrow will vary from lender to lender as they have different lending criteria. To get an accurate idea of how much you can borrow, use our Buy to Let mortgage calculator HERE.
A Buy to Let mortgages require a higher deposit amount than standard mortgages, because they are deemed as higher risk loans by the lenders. You will need to put down between 20-25% of the property value as deposit. Some lenders will lend for a 15% deposit if the rental income on your property if good, but the interest rates may be higher.
Typically, the higher your deposit, the better mortgage deals you are likely to get and it is the same in case of Buy to Let mortgages. So paying a higher deposit will get you lower interest rates, which means lower monthly payments for you, saving you money and increasing your profit margin.
A When applying for a Buy to Let Mortgage with a lender, they will want to see proof that you have a tenant in the property, who is paying rent. That is why you will need to have a tenancy agreement in place, so that you can provide this document to the lender at the time of your application.
A There are certain types of property that lender aren’t too keen to lend on and if they do lend, the interest rates are high and the criteria are strict. When you look for a property, make sure that it is one that the lenders will lend against.
We have put together a list of the type of properties on which lenders usually have restrictions:
- Holiday homes: Lenders will need proof that the property can earn a regular rental income all year round, not just a few months each year.
- Multi-storey or high rise flats: Usually the higher up the flat, the less chances of securing a mortgage. Lenders usually have a restriction on how many floors there are in an apartment building.
- Flats above restaurants, shops and offices: Lenders usually deem these properties higher risk.
- New build flats: In case of new build properties, lenders often require a larger deposit , However, there may be other incentives to buy and it varies from lender to lender, as well the location of your chosen new build.
- Ex-council properties: Lenders’ criteria for this type of property varies according to the location of the property, number of flats in each building and also on individual lending criteria.
- Listed buildings: Lenders have very strict criteria on lending against listed buildings.
A Most lenders will stipulate that you are a residential home owner for 6 months before you can apply for a Buy to Let mortgage.
Some may agree to lend, but may charge a high interest rate and may impose other restrictions.
In conclusion, if you are a first-time buyer, it will be difficult to secure a Buy to Let mortgage. To discuss your options, please call or email us and one of our expert mortgage advsers will be able to suggest the best way forward.
A A HMO means a House in Multiple Occupation, which is when your property is let to several tenants who aren’t members of the same family. To be deemed an HMO, there must beat least 3 tenants, forming more than one household and share toilet, bathroom and kitchen facilities.
HMO properties require an HMO licence which your lender will want to see when assessing your application. Buy to Let mortgages for HMO properties usually have higher rates of interest and deals vary from lender to lender.
If you are looking to secure a Buy to Let mortgage and would like to discuss your options, you can contact us by phone or email and one of our expert mortgage advisers will be able to take you through your options. Our services are absolutely free, so don’t delay, call us today!
Ever North Mortgages Limited is authorised and regulated by the Financial Conduct Authority (FCA), but the FCA does not regulate most Buy to Let mortgages.
