Buy to Let
Buy to Let Mortgages.
So you’re looking for a Buy to Let mortgage? Well, you’ve come to the right place! At TW Mortgages, we are a free mortgage advisor for Buy to Let mortgages, remortgages and so much more. We’ve helped many investors across the Southwest, from Bath to Frome, so let us help you expand your portfolio!
You can be safe in the knowledge that there will be no additional or unnecessary fees when seeking mortgage advice with TW Mortgages. We are able to offer free mortgage advice as we get commission from the lender you exchange or complete with.
But first, let’s take a look into what a Buy to Let mortgage is and who is eligible to get one.
What is a Buy to Let mortgage?
A Buy to Let Mortgage is specifically for those who wish to purchase an investment property where the owner would not be intending to live at this property.
If you wish to live in your new property, a Buy to Let mortgage is not for you. You will need to go with an alternative mortgage - take a look at the range of mortgages available or get in touch with us to discuss your mortgage needs.
How do Buy to let mortgages work?
We will assess your requirements and advise whether a repayment or interest-only mortgage works best for you. Repayment is suitable for people who wish to ultimately own the property some day. And an interest-only mortgage works for investors looking to make a monthly income as it means lower outgoings. This mortgage means you’ll be paying interest and the repayments would usually be covered by the rent collected from any tenants you live in your property.
As with all mortgages, the interest rate of your Buy to Let mortgage will depend on various factors:
The amount you wish to borrow
Your financial situation
Expectant rental income
The type of mortgage you select
The full amount of the mortgage will need to be paid off at the end of the agreed term. You may be able to extend your mortgage or you may decide to sell the property in order to clear your mortgage.
However, there is risk when it comes to relying on selling your property to pay off your mortgage. You will make a profit if house prices have increased… but on the flipside, if your property value has fallen you will be required to pay the mortgage off in full.
Who is a Buy to Let Mortgage for?
Whether you’re a seasoned investor with a range of properties already in your Buy to Let portfolio or you’re a new landlord exploring the rental property market, this mortgage can be incredibly helpful. However, even if you are a seasoned landlord or a new landlord, it doesn’t mean that you’re immediately eligible for this type of mortgage.
When it comes to looking at how much you can borrow with a Buy to Let mortgage, it will depend on personal circumstances as well as the deposit you have. Rental income will also be taken into account - lenders usually require you to earn more in monthly rent than your monthly repayments.
Are Buy to Let mortgage expensive?
An important point to flag with these mortgages is that they are more expensive than the typical residential mortgages.
Plus you will need a larger deposit which will range between 25% - 40%, depending on the property and lender. The larger deposit is required to protect the lender in the event that you default on your payments. This can happen if there are issues collecting rent from the tenants.
And lastly, Buy to Let mortgages can be expensive due to the other fees that come along with buying a property to let out. We highly recommend that you look into the regulations and responsibilities that come with being a landlord - see below for some additional fees that you must factor into whether you can afford a Buy to Let mortgage:
Stamp duty: You will have to pay more stamp duty for a second property that is not your main home
Purchase fees: Surveyors’ fees and the other charges which come with purchasing a property
Insurance: Building and landlords’ insurance
Upkeep: Maintenance and repairs for the property, or possibly ground rent
Tax on rental income: some Buy to Let investors set themselves up as a limited company for taxation purposes - we recommend you seek the advice of a specialist.
Rent insurance (optional)
Letting agents’ fees (optional)
Get in touch today to talk about your Buy to Let mortgage needs. TW Mortgages gives free mortgage advice and we have vast experience in helping investors begin or expand their Buy to Let portfolio.
Your property may be repossessed if you do not keep up repayments on your mortgage.
Not all Buy to Let Mortgages are regulated by The Financial Conduct Authority