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Buy-to-Let Mortgages

A Buy-to-Let mortgage is a secured loan you take out on a property that you intend to let out to tenants. The borrowing is assessed on the rental income to be generated from the property and not on the applicants income, as with a residential mortgage. Normally the lenders will expect the rent to cover the mortgage by approx 125%.

As this type of mortgage is classed as higher risk the minimum deposits are much higher than that of a residential mortgage. Typically, in the current climate, the minimum deposit would be 15%, but in order to obtain a competitive rate most lenders are asking for a 25% deposit.

Due to the potential increase in house prices, and the prospect of a regular income, the Buy-to-Let proposition has become a very popular way of investing money long term for pension planning or inheritance. However, it still has its drawbacks:

  • There is no guarantee that the property will always have a tenant, so provisions would need to be made to ensure funds are available to pay the mortgage
  • The property may need maintenance and repairs, pre-rental and during, which could be costly
  • There are other costs that could be incurred such as lettings agents fees, license fees and insurance
  • Additional Tax implications such as Capital Gains Tax – please consult a tax expert for further details
  • Damage caused by tenants

For Buy to Let property you also need to ensure that you have specialist Buildings Insurance. We can arrange this for you and have access to some very competitive premiums.

If you are planning on buying an investment property, looking to let out your current home or have already done so, please get in touch on 01822 615 502 or use the Contact Us facility above.

Please note the Financial Conduct Authority does not regulate some forms of Buy-to-Let mortgages.


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Dartmoor Financial

Compare the mortgage market with your friendly neighbourhood mortgage brokers #tavistock #mortgageadvicedevon #laterlifelending

HSBC cuts mortgage rates across its entire LTV range
HSBC has slashed the rates on its fixed and tracker mortgages across its full range of loan-to-value deals, now offering what it claims are some of the best rates on the market.
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2 days ago

Dartmoor Financial

Great graphic showing the different uses for a lifetime mortgage from More2Life. If you are over 55 and have a property worth at least 70k then you qualify for a lifetime mortgage. The modern form of Equity Release. It is becoming a massive option for many and the market is dominated by 2 big advice firms. We specialise in retirement borrowing too BUT our advice fee is more than half of what they charge and we are local to you with a no pressure approach to business. We are equity release council members and are part of the later life academy. If you are considering releasing money from your home please do get in touch with us either on here or on 01822 615 502. ... See MoreSee Less

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Contact us on 01822 615502