Buy to Let Mortgage Lenders
Buy to Let Mortgages are a specialist area of lending. In the past, if you wanted a Buy to Let Mortgage then you would have needed to find a specialist lender, and more often than not, they would only provide Buy to Let Mortgages. This has now changed and the availability of lenders is plentiful. The specialist lenders still remain in place and they are still the ones that provide some of the most dynamic product and criteria spread. On top of the specialist lenders quite a number of High Street lenders now have plenty of options available.
At Just Mortgage Brokers we have access to enough mortgage lenders from across the market to be able to find not only the most suitable lender, but also the most suitable rate for your circumstances.
Get in touch with one of our specialist Mortgage Brokers today to see how they can help.
Buy to let mortgage Rates
As more and more lenders compete for business in this popular specialist mortgage space, Buy to Let Mortgage Rates are becoming more completive than ever before.
Like any rates of lending set by lenders, it is set, based on the lending risk. Based on this, a Buy to Let Mortgage is deemed as a higher risk to a lender, than a Residential Mortgage where a person also lives in the property they have secured a mortgage on. This extra perceived risk means that in the majority of cases a Buy to Let Mortgage rate will be higher than a standard Residential Mortgage.
That is why it is important to speak to a specialist adviser. At Just Mortgage Brokers our Advisers really understand the markets they work within, and they have access to thousands of mortgage rates, some of which are exclusive.
What is buy to let mortgage Eligibility?
Lenders have their own specific eligibility requirements for this type of mortgage and although they may vary greatly from bank to bank, there are several main areas that will be taken into consideration;
The Anticipated Rental Yield
Rather than a traditional affordability calculator which is used for a residential mortgage, the amount available to borrow is normally linked to the rental yield. As a guide, a lender may expect the rental income to be equal to 125% of the mortgage interest, based on a calculation rate of 5%, although the rates available may be significantly lower. This allows the lender to build in an element of safety for potential future rate increases. The precise calculation will be determined by the specific lender, your income tax status and the fixed term of the mortgage.
Each lender will have their own method of calculating how much can be borrowed based on a specific rent and this may also be influenced by the tax status of the applicant and whether the mortgage is being fixed for a short or longer term.
Income and Tax Status
It may be possible to get a mortgage on income apart from property rental. However, this is not something which every lender will consider and it is usual for a lender to require a minimum income to be declared by at least 1 applicant and proved, typically in the region of £25,000.
The Amount of Deposit of Equity
Unlike a residential mortgage where a minimum of 5% deposit may be accepted, with a Buy to Let Mortgage a lender will expect a higher amount of equity, usually between 15% and 25%.