What you need to know about a buy to let mortgage.

In the UK, buy to let mortgages differ to residential deals. However with recent changes to investment mortgage regulation, you may need help working out if you are eligible for a consumer or professional buy to let deal.

When applying for a mortgage there are a few things to be aware of, such as lenders income assessments. With a consumer BTL income will be a factor, but with a professional deal you will be assessed primarily on the rent charged. This is normally 125% of the monthly mortgage payment, some lenders have increased this to 145% and many more may follow suit.

With a buy to let deal rates tend to be higher, as do fees which can be as high as 3.% of your mortgage. Factoring fees into your calculation is essential. Unlike with residential deals there are no 95% LTV BTL mortgages out there. Generally you will be asked for a minimum of 25%, however deposit requirements may well increase due to changes in stamp duty and tax relief.

Where a buyer can benefit is with the maximum age allowed for a buy to let deal, if is far higher than with a residential mortgage. Buy to let deals are assessed on rental income, and so personal income and retirement age aren’t important factors.

If you would like to discuss your buy to let mortgage options in more detail, call us at Deal Direct for advice. We have helped many investors to buy a rental property.

Note that our highly qualified advisers are regulated to offer mortgage advice only, they cannot offer financial advice as to the suitability of property as an investment. For that type of advice you will need to speak to an IFA.

Please note: 

Buy to let mortgage applications from:

• applicants whose intention is to benefit from house price growth
• applicants whose intention is to benefit from rental income
• applicants who are letting to buy

will be treated as normal buy to let and not as a consumer buy to let. In addition, their subsequent remortgage applications will also be treated in the same manner.

Call us today on 0800 048 8828 for a buy to let deal.