The average price of renting a property in England and Wales increased annually by 3.9% during April... More
The buy-to-let mortgage industry continued to grow during the first quarter of 2013, according to la... More
The buy-to-let mortgage sector has experienced something of a comeback over the past couple of years... More
The Bank of England’s Trends in Lending report has found continued demand for rental accommodation h... More
A survey of chartered surveyors has revealed that almost a quarter believe continued high demand for... 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
A rate reduction of 0.70% has pushed Godiva Mortgages’ variable for term deal to the top of the best... More
Principality Building Society has cut the rate on its two-year fixed-rate buy-to-let deal by 0.20%, ... More
NatWest Mortgage Services has made a number of rate reductions across its buy-to-let range, with its... More
A rate cut of 0.20% has boosted this two-year deal’s position in the intermediary-only buy-to-let ma... More
Nottingham Building Society has reduced the rate on its three-year fixed buy-to-let mortgage by 0.19... More
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.
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