Buy to Let
Buy to Let
Finding the best buy-to-let mortgage is the key to success. Get it right with Hestia Mortgages Ltd, giving you expert advice on buy-to-let mortgages in Burnham-on-Sea, Bristol
Investing in property that you rent to tenants can be lucrative – if you get it right. You’ll need a mortgage that works for your strategy and helps you generate the returns your looking for.
Buy to let (BTL) mortgages aren’t straightforward and they’re different in many ways to a standard residential mortgage. We’ll guide you through the process and explain the intricacies of this more complex mortgage arrangement.
Whether it’s your first time moving into the buy-to-let market, or you have a portfolio you want to refinance, we can help. We’ll navigate the lenders for you, so that you can borrow the amount you need, and maximise the returns on your rental property.
We’re your helping hand to pick your way through the jargon. We’ll make sure you’ve got all the right documents and we can do the application for you. Getting started with your buy-to-let doesn’t need to be stressful when you’ve got our expert advisers on your side.
Not all Buy to Let Mortgages are regulated by the Financial Conduct Authority.
Am I eligible for BTL lending?
Banks and building societies typically take into account the following criteria when they’re assessing your eligibility for BTL lending:
- Age: Most lenders require you to be over the age of 25. Lenders may impose an ‘upper’ age limit on the term of the mortgage by insisting that the mortgage is repaid in full before you reaches a certain age. Often that’s 65 or 70.
- Earnings: If you earn less than £25,000 a year, some lenders might preclude you from a BTL mortgage. If you earn less than £25,000 a year, some lenders might preclude you from a BTL mortgage.
- Type of property: Flats, newly built property, or former local authority-owned properties can be unacceptable to lenders. You may have to prove that your property is over a certain value before the lender will consider the BTL mortgage.
- Existing borrowing: Lenders may restrict the number of BTL mortgages you can have with them at any one time. Or they may impose a ‘cap’ on the total amount of BTL funding they’ll give you.
• Type of property: Flats, newly built property, or former local authority-owned properties can be unacceptable to lenders. You may have to prove that your property is over a certain value before the lender will consider the BTL mortgage.
• Existing borrowing: Lenders may restrict the number of BTL mortgages you can have with them at any one time. Or they may impose a ‘cap’ on the total amount of BTL funding they’ll give you.
Do I need a good credit record?
Your credit score is important. You’ll need a good credit rating to get a BTL mortgage. You can improve your credit rating by paying debts and bills on time and keeping up with any other loan repayments.
How do the banks assess whether I can afford a BTL mortgage?
Lenders will look at the amount you estimate you’ll make in rental income from the property. They’ll want an independent assessment that indicates that the property has sufficient rental income to repay the level of loan you’re looking for.
Typically, BTL lenders look for rental income that covers at least 125% of the monthly interest payment. That means, if your monthly mortgage payment is £1,000, the monthly rent should be a minimum of £1,250.
What deposit do I need?
At least 25%. Usually the highest loan-to-value (LTV) mortgage available on a BTL basis is 75%. So, you’ll need a deposit of at least 25% of the property’s purchase price to proceed.
If you’re able to contribute substantially more than the 25% minimum, then you’ll give yourself a chance of improved lending rates and interest rates.
What’s the interest rate on a BTL mortgage?
Interest rates fluctuate between providers and mortgage deals. But be aware that interest rates on BTL mortgages tend to be higher than those applied to standard residential mortgages. That reflects the increased level of risk that the lenders perceive themselves to be taking.
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