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Buy to Let Mortgages – More than 80+ great lenders

All about Buy to Let Mortgages
Buy to Let, or BTL mortgages are loans specifically for landlords who wish to invest in property and in turn, rent it out. What follows is more information about how Buy to Lets work, who is eligible to get one and some of the potential issues involved.
Can I get a Buy to Let mortgage?

You can get a BTL if you fit the following criteria:

How is a Buy to Let mortgage different?

Just like with a residential mortgage, there is the loan, fees and a maximum amount you can borrow, however with a BTL mortgage:

Buy to Let MortgagesHow much can I borrow for my Buy to Let mortgage?

Put simply, the monthly rent payment you receive from your tenant needs to be higher than your Buy to Let monthly loan payment. This is called the coverage and your lender is likely to want to see at least 125%. Looking on sites like Rightmove and On the Market will give you an idea of what rental prices similar properties in your area are fetching.

Where can I get a Buy to Let mortgage?

This is where we come in! We are independent mortgage advisers who have access to over 155 specialist and mainstream lenders to ensure you get the absolute best loan for your circumstances. Our experienced advisers will take time to understand your needs and circumstances and recommend a mortgage that fits with your budget and long-term plans. The Connect team will take away all the headache of the mortgage process by dealing with the paperwork, lender, solicitor, insurance providers and more. Don’t take our word for it, see what some of clients say about us!

What if?..

What if your tenants leave or your property needs a major repair and you don’t have any income? It’s a good idea to bank some of the rental income in case of such events. Don’t rely on selling the property to pay off the mortgage, prices go down as well as up. If you do sell your property, you could be liable for Capital Gains Tax. There is a Capital Gains Tax calculator at GOV.UK.

What about tax on a Buy to Let?

If you are a first-time Buy to Let investor, we can provide you with all you need to know about the range of mortgages available. Our free guide helps you to understand how a Buy-to-Let mortgage works and our experienced advisers will take the time to coach you on the lending options available specifically to you.

Using the latest market research tools, we discovered the top questions people are asking about residential buy to let mortgages. We also provided the answers!

The right mortgage has to be chosen for the right usage. For example, a business such as a shop, cannot occupy a property that has a residential mortgage. A business, such a property business, can get a residential mortgage if the planned usage of the property is to let the property on a business basis to a third party. In this case, the mortgage type is a Residential Investment Mortgage, or more commonly known as a Buy to Let mortgage.

Most residential lenders will grant you ‘consent to let’ if your circumstances change and you would rather let out the property instead of sell it. They may however have conditions relating to the maximum loan to value, charge a fee and/or increase the interest charged

Mobile homes are neither freehold or leasehold, so traditional mortgages are not available, however other options such as Equity Release from another property could potentially be a solution. Contact us to explore options.

The interest rate on a buy to let mortgage is normally a bit higher than a residential mortgage rate. This is because the lender is taking a higher risk. The more complex the buy to let is, for example if purchasing a HMO via a Ltd Company, then the higher the interest rate is likely to be.

If you have a residential mortgage on say a flat that was your first home and you now wish to rent it out, this is possible, but you must seek consent from your existing lender. Alternatively, you could re-mortgage the property on to a buy to let mortgage.

The interest rate on a buy to let mortgage is normally a bit higher than a residential mortgage rate. This is because the lender is taking a higher risk. The more complex the buy to let is, for example if purchasing a HMO via a Ltd Company, then the higher the interest rate is likely to be.

If you wish to keep a property that you have been living in and rent it, you can change your residential mortgage to a buy to let mortgage, by re-mortgaging your property to a buy to let mortgage product.

A property that is being used fully for commercial purposes, such as a shop cannot have a residential mortgage on it. However, if you are using your own home also as a commercial property, perhaps to run a home business, then there are residential lenders that will consider lending on a partially commercial property where you occupy the rest of the property.

You should make sure that you arrange the correct type of insurance for the property usage. For example, if the property is let out, you will need landlord insurance, even if the property has a residential mortgage. As a mortgage lender needs to be noted on an insurance policy, you should check that you have your residential mortgage lenders permission first before letting out the property.

You can let out a property that has a residential mortgage on it as long as you seek permission from your residential mortgage lender.

If you wish to keep a property that you have been living in and rent it, you can change your residential mortgage to a buy to let mortgage, by re-mortgaging your property to a buy to let mortgage product.

It is possible to have more than one residential mortgage. You could for example have a second residential mortgage for a second home you occupy just for work or for holidays. You will need to demonstrate you can afford both mortgages. If you plan to let out any property you won that has a residential mortgage, you will need to seek consent from your residential lender or change the mortgage to a buy to let mortgage.

If you own a property that has a mixed uses, such as a shop with a flat above it, it is still possible to get a mortgage. The type of mortgage will depend on how much of the property is being used for a particular usage. As a rough guide, if more than 60% is used for residential or Buy to let use, there are lenders who will consider a residential or a buy to let mortgage on a mixed use property, even if the remainder of the property is for commercial use.

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