Buy to let mortgages differ from regular mortgages in several ways:
- Fees for buy to let mortgages are normally much higher than residential mortgages
- Buy to let mortgages have higher interest rates as they are seen as riskier to lenders
- Most buy to let mortgages will be interest only - so your repayments will seem a lot cheaper than most residential mortgages but you will have to pay the capital off at the end of the term
- The minimum deposit required for a buy to let mortgage is usually 25% but can vary between 20% and 40%
- Stamp duty on a property which will be let out will cost an additional 3% on top of the usual tax
- Rather than your income, how much you can borrow on a buy to let mortgage is based on the amount of rental income you could achieve
- Most lenders will require a rental income of at least 25-30% more than your interest repayments
There are many things to consider when deciding whether to invest in buy to let. Can you afford the risk? What are the tax implications? And if you decide to apply for a buy to let mortgage, where do you find the best deal? To take your next steps, get in touch with a buy to let specialist from The Mortgage Hut who can talk you through the process. The Mortgage Hut have access to a range of banks and building societies along with specialist lenders that offer buy to let mortgages so we can find the product which is suitable for your specific circumstances.
Read more information about buy to let here or get in touch to arrange an appointment with an adviser from The Mortgage Hut.