Buy to let mortgages

Buy to let mortgages were introduced to cater for the increase in investment purchases during the last property boom.

Unlike a mortgage that is taken out on your home, a buy to let mortgage does not necessarily use your income as a primary criterion when deciding to loan you the money to buy the property.

This is because other criteria are more important; you will usually have to put down a sizeable deposit (around 25% of the property’s value is fairly typical, currently) and the lender will also have to satisfy itself that the average monthly rental income you should receive is at least a certain amount over and above the monthly mortgage repayment; 125% is typical.

So if your monthly mortgage repayment is £400 per month, then the lender will expect your minimum monthly rental figure to be 125% of £400; that is, £500.

Other lending criteria are likely to apply, too.  Buy to let mortgages were relatively easy to get before the 2008 credit crunch, however nowadays your household income and an excellent credit record are likely to be factors.

Use our buy to let mortgage calculator to work out what your monthly repayments could be if you took out a buy to let mortgage.

The information on this site is intended to be generic information and is not advice.  If you need advice in relation to your mortgage needs, you should consult a professional mortgage advisor.

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