Buy To Let

If you’re thinking of purchasing a second property for rental purposes, the mortgage you need  is known as a Buy to Let. The criteria for lending on a Buy to Let property is ever changing and there are various aspects to consider. Currently, a straightforward Buy to Let mortgage requires your rental income to be in excess of the monthly mortgage payment by up to 25%. And some lenders set a minimum earned income level required, in addition to your rental income. 

If you’re thinking of purchasing a second home to rent out, then you should be looking at a Buy to Let mortgage. The rates are usually slightly higher than those of a normal residential mortgage, however, the arrangement fees can be much lower. 

If you have substantial equity in your home and do not need to access all of it to purchase a new home, you may wish to consider a Let to Buy mortgage.  Otherwise, you will need to remortgage to raise your capital, and then let your existing home out and buying a new one to live in. Normally, this obtainable on residential rates and can go up to 90% loan to value.

The majority of lenders are looking for a mortgage repayment of at least 25% (Source: Trigold (BM Solutions) – 16/09/2009) more than the rental income. It’s important to note that there may also be criteria laid down as to which type of tenants are acceptable.  Some lenders will consider your income should the rental income fall short, and this comes under the House-to-House scheme.

Whether you’re thinking about a Residential or Commercial mortgage, whether you’re First Time Buyer, or you want to explore your options for Equity Release, Shared Ownership or Buy to Let, we can talk you through the most suitable mortgage available to you and ensure that you fully understand and how it is set up. 

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