Personal
Business
close
Products
About us
Resources
Call us: +44 1632 960212

Buy To Let Mortgages Explained

There are many different types of mortgages available to you, but for those seeking to develop a passive income stream through the rentals market, a buy to let mortgage is essential.

What is a Buy to Let Mortgage?

Simply put, a buy to let mortgage is a mortgage that is sold specifically to people who are looking to buy property as an investment as opposed to a mortgage for a home of their own.

If you are planning to rent out a new property or consolidate an existing property portfolio, the majority of lenders will prefer you not to finance your purchase with a standard residential mortgage.

Who Are Buy to Let Mortgages Aimed at?

Buy to let mortgages are a great tool for both seasoned investors with an existing portfolio of properties as well as new landlords looking to take their first steps into the rental property market. Not everyone is entitled to take one out though: as a form of commercial financing, buy to let mortgages are more expensive than the typical mortgage and require deposits of between 25% and 40%.

How do Buy to Let Mortgages Work & How Much Can You Borrow?

Most borrowers will look to take out an interest-only mortgage for their chosen property.

The mortgagee then only pay the interest on the loan as it accrues every month, generally from the proceeds of the rent they collect. The capital debt – the full amount of the mortgage – is paid at the end of an agreed term.

How much you can borrow will also depend on the level of your deposit as well as your wider commercial and personal circumstances.

The tax allowances for buy to let mortgages have also changed, however many landlords will choose to set up limited companies to maximise their portfolio. We would always encourage you to access specialist advice when setting up a limited company.

We are here to help you
Your first consultation is completely free-of-charge. All you need to do is select a convenient time & date and outline how we can assist you.
virtual advisor
Try out our new Virtual advisor!
Get all benefits of Regular Advice via AI and ML algorythms
Related articles
Featured media
Investment
Mortgage
The Myths of Buy to Let Properties Explained
30 Apr 2021 · Nic Cobb

Over the course of our lives, many of us will think about purchasing a buy to let property, in this article we…

Featured media
General
Mortgage
How Does the Ending of Furlough Impact Your Mortgage Application?
23 Apr 2021 · Nic Cobb

As a result of the pandemic, the past year or so has been marked by social, financial and business strife…

Featured media
Investment
Mortgage
Other
Indirect Property Investments – The Alternative Route for Investors into Real Estate
07 Apr 2021 · Nic Cobb

Property investments often form the core of a developing or established, diversified investment portfolio and offer a stable return on…