Extensive Range of ServicesAcross all lending sectors
Friendly Professionals delivering honest and knowledgeable advice
Whole of Market Accessfinding the right solution for you
Remote Servicingexpert advice without you leaving your home or business premises
What is buy to let mortgage?
Buy to Let is the common name for a mortgage where you are looking to purchase a property to rent out. The property must be a residential property and usually on a single tenancy (AST) and have no commercial element to it. Where there is more than one AST these are commonly known as a House of Multiple Occupancy (HMO) see HMO for more information.
In lots of ways, it works similar to a residential mortgage other than the loan is based on the rental income expected and not on your personal income multiples. Lenders normally work out the maximum based on the following calculation 140% at pay rate on 5 year fixed products. E.G a property earning £500 per month rent and a rate of 3.4% would be calculated as below.
(£500×12)/140%/3.4% = £126,050 maximum lend subject to LTV limits
Where this calculation will not meet the desired loan again a few lenders will use the spare income you may have to meet the rental shortfall known as top-slicing. Check out our buy to let stamp duty calculator.
Loans to values to 85% of the purchase price are available.
Most lenders will expect you to either own your residential property with or without a mortgage or have other investment property. The reason for this is to discourage buying a property under a Buy to Let mortgage and then moving into it due to the removal of income multiples.
There are few lenders that will allow you to purchase a buy to let without owning your own home but these can be subject to criteria such as the following, this is being it is seen as a higher risk to the lender:
- Larger deposits
- Minimum income levels needed
- Higher rates
Need help? Get in touch today for expert advice.
See What Our Customers Think
-
Thank you to Try Financial and especially Aaron for helping us buy our dream home. The whole process was made a lot less stressful thanks to your advice, chasing things... read more Sian Osborne
2/22/2021 Helped us enormously and I wouldn't hesitate to recommend the company. Aaron was really helpful and informative throughout the whole process. Thank you! Stuart Wade
4/23/2021 As a first time buyer, I was a bit ‘in the dark’ with the whole process but I absolutely feel like I have sailed through with the help of Aaron... read more Kieran Catchpole
5/25/2021 Aaron was absolutely incredible throughout the whole process, constantly going above & beyond to get our mortgage sorted efficiently.
Aaron was always happy to help and answer any questions I had... read more ryan cross
3/18/2021 - When we decided to buy a new home we where very unsure of the process of paying off our existing mortgage and applying for our new mortgage.
After having the initial... read more
Tristen Lee
3/09/2021
