Landlord mortgage options

Buy to Let mortgages have been on offer in the UK since the late 1990's and are mortgages which allow buyers to purchase a property which they can then let out (rent) to tenants.

In recent years, private property rental, whether that is full property rentals or house or flat shares, has seen a massive increase and is now a very popular investment vehicle in the UK.

Getting a buy to let mortgage

The amount of money you can borrow is largely determined by the anticipated rental value of the property. The rental income usually has to cover a certain percentage of the mortgage repayments, this is to allow some surplus rent to cover other costs such as property maintenance and long periods of time when the property is empty and therefore no rental income is taken.

Most lenders will require a minimum deposit to be placed down when taking out a Buy to Let mortgage, probably around 10%-15% but in these tougher economic times this has risen to approximately 25%.

Sometimes lenders will offer Buy to Let mortgages based on your salary. For more information on buy to let mortgage schemes and interest rates contact your local Bank or Building society.

Be prepared to share details of your personal finances, including bank statements and wage slips when talking to lenders.

Buy to let interest rates

Typically the interest rates that are offered on Buy to Let mortgages are very slightly higher than those offered on residential mortgages and may have slightly higher fees attached to them.

The higher interest rate is largely down to the perception that mortgages on rental properties carry a higher risk than mortgages on residential properties.