BUY TO LET MORTGAGE

buy to let mortgage is a loan secured against a property which you own and intend to rent out to a tenant.

One of the big differences between a buy to let mortgage and a residential mortgage is how much you can borrow is based mainly on how much rent the property can earn, rather than your own income. As such, the majority of BTLs are not regulated by the Financial Conduct Authority (FCA).

 

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What should you consider when looking at an investment property?

EPC Rating

EP

 

Rental Income

A fixed-rate mortgage is a mortgage where your interest rate is guaranteed to stay the same for a set period of time.


After this set period of time you would move onto the lenders Standard Variable Rate which is usually significantly higher. 

To avoid this you may consider remortgaging at the end of your fixed rate. to read more about remortgaging click here 

 

Stamp Duty

A fixed-rate mortgage is a mortgage where your interest rate is guaranteed to stay the same for a set period of time.


After this set period of time you would move onto the lenders Standard Variable Rate which is usually significantly higher. 

To avoid this you may consider remortgaging at the end of your fixed rate. to read more about remortgaging click here 

 

In order to make an informed decision you need to know what kind of mortgages are available

Fixed Rate Mortgages

A fixed-rate mortgage is a mortgage where your interest rate is guaranteed to stay the same for a set period of time.


After this set period of time you would move onto the lenders Standard Variable Rate which is usually significantly higher. 

To avoid this you may consider remortgaging at the end of your fixed rate. to read more about remortgaging click here 

 

Tracker Mortgages

Tracker mortgages are typically aligned with the Bank of England Base rate for a set period of time, often between two and five years.

 

If the Bank of England base rate were to increase, the interest rate on your mortgage would also increase and your monthly payments would rise. Conversely, if the base rate were to decrease, you would see the benefit as your monthly repayments would be reduced. 

Discount Mortgages

With a discount mortgage, you pay the lender's standard variable rate (a rate chosen by the lender that doesn't change very often), with a fixed amount discounted. For example, if your lender's standard variable rate was 4% and your mortgage came with a 1.5% discount, you'd pay 2.5%.

 

Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.