Moneyfacts.co.uk Best Buys show the best products chosen by our independent experts. Where we have been able to we have also provided a link for you to apply via Moneyfacts.co.uk today. Products shown with a yellow background are sponsored products.
Buy to let is when you buy a property with the intention of renting it out to tenants. Some landlords do this as part of an investment strategy, but increasingly it is individuals changing from a residential mortgage on their own home, to a buy to let mortgage when they move out (perhaps to move in with a partner or during a period of working abroad).
Buy to let mortgages are very similar to a mortgage on your home, with fixed rates and trackers available. However, you should expect higher arrangement fees with a BTL as well as a different way of assessing whether you can have the mortgage.
Most mortgage lenders link whether you can afford the mortgage, to the rent you are charging or propose to charge. Generally-speaking you'll need the rent to be at least 125% of the mortgage payment in order to satisfy your mortgage lender. But you should check carefully before making an application that you will be eligible, as a significant number of lenders have more stringent affordability requirements.
Remember too that while the lender may consider the mortgage affordable, you need to be happy it is too. Lenders don't factor in the other costs of running a buy to let property, such as insurance, agent's fees, and other maintenance costs.
Fixed rates are great if you want to know exactly what you are paying for a set period. Specifically in terms of buy to let they can be a great way to manage your costs. Sometimes fixed rates aren't as cheap as the best tracker rates available to landlords, but they do offer the certainty that your payment won't go up.
With short term fixed rates you should also consider the costs of remortgaging your BTL property regularly. When your fixed rate period comes to an end you will be on your lender's buy to let standard variable rate, or possibly a tracker based variable rate. This could be higher than your fixed rate, so if you don’t remortgage, it’s important you have enough manoeuvre in your budget to absorb the higher mortgage costs.
Speak to a BTL mortgage adviser Buy to let home Compare 3 year fixed BTL mortgages Compare tracker rate BTL mortgages Compare BTL mortgages for new landlords
Buy to let guides
If you’re thinking of becoming a landlord or want to expand your portfolio, now could be a great tim... More
One of the announcements of George Osborne’s Summer Budget was the cap to the amount landlords can c... More
Knowing how you’ll secure a comfortable retirement is one of the cornerstones of financial planning,... More
There was once a time when the buy-to-let market was fairly limited for wannabe landlords, with more... More
Have you ever had your rent increased at the end of your tenancy agreement? According to research, m... More
Buy-to-let is enjoying a bit of renaissance: more mortgages available, higher rental yields and high... More
Whether you let a single flat or 100 properties, find out the tax on buy-to-let property and income ... More
Whether you’re a newbie to buy-to-let, or a seasoned investor, one of the most important things when... More
Cumberland Building Society has reduced the rate of its discounted variable rate buy-to-let (BTL) mo... More
Coventry Building Society has reduced the rate of one of its variable rate for term buy-to-let (BTL)... More
NatWest has reduced selected rates across its buy-to-let mortgage range, with its variable two-year ... More
Principality Building Society has reduced the majority of rates across its buy-to-let mortgage range... More
Leeds Building Society has reduced the cost of its five-year fixed buy-to-let mortgages by 0.10%, ea... More
Stay in the know with all the latest information, of-the-moment consumer trends, best-in-class products & providers and helpful tools from Moneyfacts.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.