5 May 2016
5 May 2016,

UK property prices have been steadily increasing in recent years – so much so, that family financial help (or the ‘Bank of Mum and Dad’ as it’s commonly called) is predicted to account for more than £5bn of house purchase deposits this year alone.

If you’re looking for a buy-to-let property for sale, chances are that you already own a home, and (hopefully) don’t need to rely on your parents to fund your purchase. However, unless you’re one of the fortunate few, you may need to seek financial assistance in the form of a buy-to-let mortgage.

Here’s some key information about this type of mortgage, and what to expect when you arrange one.

What is a Buy-to-Let Mortgage?

If you’re investing in a buy-to-let property, you won’t be able to use a standard mortgage. In fact, it’s illegal to do so – you must finance your purchase using a specialist buy-to-let mortgage instead. This is why it’s important to tell your mortgage lender exactly what your intentions are before committing to anything.

In order to secure a buy-to-let mortgage, you’ll need to earn a certain amount each year. This varies from lender to lender, but on average, your earnings should be £25k per year or higher. You’ll also need a good credit rating.

Standard Mortgages Vs Buy-to-Let Mortgages

A buy-to-let mortgage isn’t that different to a standard one, but there are a few key differences that you should know about.

  1. Interest rates are usually higher with buy-to-let mortgages, as it’s essentially a business proposition, rather than a straightforward home purchase. Also, be aware that most buy-to-let mortgages are interest-only. This means you won’t be paying off any of the capital owed on the property, and will have to pay it back at the end of the mortgage term.


  1. Unlike standard mortgages, buy-to-let mortgages require a higher deposit. Expect to have to put down at least a quarter of the property’s value, if not more.


  1. Mortgage fees. All mortgages incur fees, but buy-to-let mortgage fees are often higher. It’s important to ask your mortgage lender exactly what fees you’ll be paying before committing to the loan.

Investing in Property in the UK – How Much Can You Borrow?

How much you’ll be permitted to borrow depends largely on your income – both from your existing employment and your predicted rental yield. Your mortgage lender will want to know how much you anticipate generating from your rental property, and they’ll work out how much they’ll lend you, based on this figure.

Mortgage lenders like to see that your rental income will be at least 25% higher than your mortgage payments, though in some cases, this can be as high as 40%.

Factoring in Other Costs

When seeking buy-to-let property for sale, remember that mortgage costs aren’t your only financial commitment. It’s important to take into account stamp duty, plus insurance and surveyor costs. Make sure you know exactly what you’ll be paying before you commit.

The Buy2Let Shop

If you’re ready to start looking for property investment opportunities, but aren’t sure where to start, The Buy2Let Shop can help. We’ve got a range of great properties not currently available to the general public, and we offer support and guidance throughout your purchase – from identifying suitable properties to brushing up on your knowledge at one of our property investment seminars.

To find out more about our services, visit The Buy2Let Shop site today.


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