A buy-to-let mortgage, is a type of mortgage provided specifically for people who plan to buy a property as an investment, rather than to live in themselves. If you are planning to rent the property out, a standard residential mortgage would not be suitable. Instead you would need a buy-to-let mortgage.
Buy-to-Let Mortgages Wirral
Updated: 7th December 2020
On Wednesday 8th July, the Government announced a stamp duty holiday for property buyers in England and Northern Ireland which will be in place until 31st March 2021.
This has resulted in an average saving of approximately £4,500. As you may have expected, Covid-19 has had an impact on the mortgage market and the way lenders view an application. This has mostly impacted first time buyers as 95% mortgages have been removed and 90% mortgages hard to come by.
Buy-to-let mortgages have largely remained the same as you have to put a minimum deposit of 25% on a buy-to-let mortgage and therefore you present a lower risk to the lender. We would always encourage you to speak to an expert advisor before applying for a buy-to-let mortgage.
What is the difference between a buy-to-let mortgage and a standard residential mortgage?
Typically, a buy-to-let mortgage will tend to be interest only, meaning that your monthly payments will only cover the interest element on the mortgage. Therefore, your capital debt will stay the same throughout. You would need to pay this amount in full at the end of the term, this can be done following the sale of the property or you could keep the property and remortgage.
A buy-to-let will usually require a higher deposit compared to a standard residential mortgage. You are also likely to pay a higher rate of interest and also more stamp duty providing the property is not your main home.
Buy-to-Let - Quick Questions
Why are buy-to-let mortgages more expensive?
The lender will usually view a buy-to-let as a higher risk and therefore they involve higher interest rates and fees.
This is because lenders expect the mortgage payments to be made, following the rental payment being made. Therefore, if there are issues collecting the rent, there may also be a delay or complication paying the mortgage.
What deposit do you need for a buy-to-let mortgage?
As mentioned above, lenders typically see a buy-to-let mortgage as a higher risk, therefore they expect a higher deposit. This can vary between lenders of course, but the average deposit is around 25% with some lenders asking for as much 40%.
The benefit to putting a larger deposit down is that the monthly payments should be lower as a result.
Book Your FREE Appointment
Arranging a Buy-to-Let mortgage can include more work than a standard residential mortgage, leave the hard work to us and Book your FREE no obligation appointment today. Telephone, Zoom and face-to-face appointments available.
How we work with a buy-to-let?
At Mortgage and Insurance needs, we take the time to find out as much as we can about your needs and requirements. That’s why, the first step is to have a FREE appointment. Whether that be via telephone, Zoom or face-to-face, if you’re local. We will discuss various options and find out exactly what you are looking for.
At M.A.I.N, we use our experience, market knowledge and established relationships to source the best mortgage option for you. We have access to over 27,000 different mortgage options, but don’t worry as we find out more about your needs, we narrow down the search for you. Then we explain the benefits of each option to you. You can then make an informed choice of which option would be best for you.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES