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Most Buy-To-Let mortgages are not regulated by the Financial Conduct Authority (FCA). Whether a Buy-To-Let mortgage is regulated depends on your personal circumstances. The above information assumes that FCA regulation does not apply to the mortgage products shown.
A two year buy-to-let mortgage is a mortgage you can use to invest in a property that you are going to rent out to someone else. The rates you pay to your lender will not increase or decrease for 2 years. After the 2 years are up, you will usually be transferred to the lender standard variable rate.
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.
Two year fixed rate mortgages can provide the security of fixed regular payments while still giving you the ability to remortgage after two years.
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.
When you apply for a buy-to-let mortgage, your lender will perform certain checks to make sure you can afford the mortgage before they offer it to you. Their decision will be based on:
This will vary from provider to provider, and will depend on your chosen loan-to-value and deposit size. However, a 2 year fixed buy-to-let mortgage will usually come with higher interest rates, higher fees and will requires a larger deposit (usually at least 25% of the property value / 75% LTV).
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 buy-to-let mortgage adviser
Compare 3 year fixed buy-to-let mortgages
Compare 5 year fixed buy-to-let mortgages
Compare tracker rate buy-to-let mortgages
Compare buy-to-let mortgages for first time landlords
Read our buy-to-let mortgages guides
Written by Leanne Macardle, last updated: 10/10/2018
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