What is a Buy to Let mortgage?
If you are planning on purchasing a property with the intention to let it out, or have a property you are unable to sell and wish to begin letting out instead, then a Buy to Let mortgage is what you will need to make sure this happens.
The amount you are able to borrow for a Buy to Let mortgage, is based upon the amount you will be able to let your property for.
You will usually be required to pay a larger deposit, around 20% and 40%, and have higher interest rates than normal mortgages. Buy to Let should be seen as a long term financial investment, so it is important to know everything about it, before heading down this route.
Why now may be the right time
- Currently record low interest rates on Buy to Let mortgages, may be a good time to begin looking
- Property investments have the potential for a healthier increase in value, through renovation and redecoration
- There is currently a large demand for rental properties, with many people now unable to raise deposit needed to purchase their own home
Things to think about
- Your property may fall in value
- It is a long term investment, you need to have an idea of the end in mind. How long will you be investing for? What do you wish to achieve from this?
- Your interest rate may rise or fall
- It can be a risk
- The location of your target tenant. If there are a lot of primary schools in the area, expect families. If there is a University nearby, expect students.
- The condition of the property. Will you need to spend a lot on renovating the property? This would get tenants in faster, but could also mean a slow start to saving once rent is being paid
We have a professional and friendly team at The Mortgage Hut, happy to talk you through the process and give you expert advice. Contact us through our contact form today, and an adviser will be in touch to discuss your next steps.