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Some lenders have reduced the rates on some of their buy to let mortgage products. The Skipton Building Society is one of those that has recently announced a two-year fixed rate buy to let mortgage with a rate of 3.89 per cent which is down from 4.09 per cent and is for those with a LTV (loan to value) of 70 per cent. With the same 70 per cent LTV buy to let investors could opt for the Skipton Building Societies three-year fixed rate mortgage with a rate of 4.29 per cent.
Rental requirements continue to push up demand for the buy to let mortgage market and interest for investors wishing to get into the buy to let sector to secure an income for their retirement or build up their existing property portfolio. There was a general increase in buy to let properties bought last year due to the fact that property prices were low and it appears demand for rented accommodation still continues to outstrip supply.
A buy to let mortgage is for those who wish to become prospective landlords and these mortgage products are different from conventional mortgages as lenders calculate the amount to be borrowed on the rent that may be generated by the property when tenanted. This mortgage situation does not always find borrowers the most competitive rate in the mortgage market as a buy to let mortgage does tend to be higher.
These factors need to be taken into account by investors and also the deposits for this type of mortgage are usually higher with most lenders asking for a 20 per cent deposit. Home owners wanting to get into the buy to let market should research the area and property fully to ensure they attract demand from tenants in the future and therefore secure their buy to let mortgage income.
