Best Mortgage For Buy To Let

Buy To Let Mortgages

If you just starting out in the property investment market and completely bemused as to which type of mortgage to choose for your buy to let property, there are specific mortgages for Property Investment - i.e. to rent out rather than live in - you will need a buy-to-let (BTL) mortgage.

Buy to Let mortgages are unique and quite different from the mainstream mortgages as, instead of assessing the amount you can borrow from a lender, based on your income, loans are calculated on the rent you could get for the property.

In the past mortgage lenders required a rental coverage that was above that of the mortgage amount, for example 120 % of the monthly repayments. But lately the rules have become more relaxed and you can get a mortgage with rental coverage of 100 per cent in some cases. The credit crunch is seeming to work in favour of the property investor compared to the standard residential mortgage.

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However, it is still usual practice to have to raise a deposit of 10% or more, but more recently the number of No Money Down deals have populated the market.  Traditionally only a small number of specialist lenders offered BTL mortgages but more recently we have seen high street banks start to lend to landlords.

BTL mortgages can normally be either repayment or interest-only loans. Interest-only mortgages mean cheaper monthly payments but the property will not be yours at the end of the term – you will still need to repay the capital amount or sell the property. Repayment mortgages ensure that you repay a bit of the capital and a bit of the interest each month and at the end of the term the debt is fully paid off.

If you have have ambitions in the Property Investment martet and would like to find out more information about Buy-to-Let mortgage option you can register for a Free property Investment Workshop in your area.

Click here to find a Property Investment Workshop in your area