Buying a property to rent out is a huge investment for the future. Whilst becoming a landlord can be hugely profitable, a standard mortgage will not suffice.
Landlords have to get a special buy to let mortgage on their property and there are many of these available on the market so it can be tricky to decide which one to go for.
Our buy to let mortgage comparison guide below should help you compare buy to let mortgages to be able to source the perfect mortgage for you. Here’s some important information about the most popular types:
Generally a 25% buy to let mortgage deposit is required, but the larger the deposit you put down the better the repayments plan you’ll be able to negotiate. Often people who can afford to put down a buy to let mortgage deposit of around 40% can get the cheapest rates.
How much you pay back in each repayment varies depending on the type of plan you choose. Remember, the interest rate is normally higher than that of a standard mortgage and the mortgage you’re offered tends to be calculated on your expected rental income.
There are four different types of buy to let mortgages, these are fixed rate, variable rate, repayment and interest only.
Be aware that most mortgage lenders have other eligibility criteria that you must qualify for. This can be things like being over a certain age and earning a certain regular income. Remember that with buy to let mortgages, arrangement fees tend to apply and these can be much more expensive than with a standard mortgage.
When considering a buy to let investment and which mortgage plan to choose it’s important to factor in the months where your property could be empty or void of tenants whilst maintenance and repair work is carried out, and that you can afford your mortgage repayments in these periods.
If you need more advice on sourcing the right buy to let mortgage for you, House Network’s advisors will be able to help you compare buy to let mortgages to find the right type of mortgage for your buy to let investment, whether it’s a deposit, interest only, fixed or variable payment plan.
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