Buy To Let Mortgages

Buy to Let mortgages have now been in existence for over 10 years and have evolved quite dramatically over that time. However since the credit crunch there has been a number of departures from lenders including CHL, Paragon and Mortgage Trust and the loan to values have changed meaning that you now need a minumum deposit or equity in the property of at least 25%.

Interest rates have become more competitive and now not too dissimilar to residential mortgage rates. You have the option as with residential mortgages of Fixed, Discount, Tracker and Flexible mortgages and there are even a few lenders offering offset facilities.

In the main a Buy to Let mortgage should be self financing, this means that the lender requires the rental received from the tenant to cover the monthly mortgage payments. The preferred mortgage repayment option by most landlords is an interest only option and unlike the residential sector where lenders look for an investment vehicle behind the mortgage, Buy to Let lenders are happy that the landlord will be selling the property at the end of the mortgage term to pay back the initial amount borrowed.

Rental requirements by the lenders vary and are very often calculated at 125% at pay rate. But with the increased competition there are some lenders that only need the rental income to equate to the monthly payment, hence 100% at payrate. If the rental income requirement needed by the lender was still hard to achieve there are a few lenders that will look at each case on an affordability basis so will look at your earnings, the rental due and your existing mortgage commitment. If according to their calculation there is surplus then this can always be the alternative route to a BTL mortgage.

You will need a minimum deposit of 20% to secure a Buy to Let mortgage if you are already a BTL landlord and 25% if new to BTL.

New build properties can require as much as 35% deposit but some lenders will accept a builders deposit of up to 5% therefore reducing the deposit required.

There is no limit to how many Buy to Let properties you own, (you just need the deposits), there are still 100s of Buy to Let mortgages and Buy to Let remortgages available. At Grovelawn Financial over 30% of our business is in this market and as such are able to offer semi-exclusive mortgages from leading High Street and specialist lenders.

Your property may be repossessed if you do not keep up repayments on your mortgage.

For more information on how we are paid for mortgages please click here.

Grovelawn Financial Services, 1C Restormel Industrial Estate, Liddicoat Road, Lostwithial PL22 0HD — T: 01208 872689