Buy to Let Mortgages

A Buy to Let mortgage is a loan designed for people who want to buy a property and rent it out rather than live in it themselves.

Finding the right buy-to-let deal is really important to ensure that you make the most of your investment and, as a property investor, you want to spend your time finding the right properties and then capitalising, not scouring the market for the right mortgage. Let us absorb that hassle and make the process as easy as possible. Our independent status gives us access to a vast range of mortgage products to meet your borrowing requirements.

Usually (though not always) a Buy to Let mortgage is set up on an interest-only basis, with monthly payments being met by the rental income received and the remaining mortgage paid off when the property is sold. However they can also be secured as a repayment mortgage depending on your long term preference and repayment goals. Your Cowens adviser will be happy to discuss all the options.

If you rent out a property on which you only have a residential mortgage, unless you have applied for special conditions from your lender, you could be in breach of your mortgage agreement which could put your property at risk of repossession.

The Financial Conduct Authority does not regulate some types of Buy to Let.

Can I get a Buy to Let mortgage?
There are a few further criteria to obtain a Buy to Let mortgage, compared with a standard residential mortgage. Ordinarily you will need to:

• Be a homeowner
• Have a good credit score
• Pay off the mortgage in full before a certain age
• Many lenders require an annual income of £25,000 though some have no minimum income requirement
• Find a property that is ready to let straight away
• Some lenders prefer previous landlord experience though others are open to first-time landlords (everyone has to start somewhere!)

With access to so many lenders we can ordinarily find options for all types of application so, even if you don’t fit all these criteria, do speak to a Cowens adviser to see how we might help.

What’s different about a Buy to Let mortgage
As well as the stricter acceptance criteria a Buy to Let mortgage usually incurs higher arrangement fees and requires a higher deposit of (ordinarily) 25%. Mortgage interest rates are usually higher due to the increased risk to lenders but, since most Buy to Let mortgages are interest-only, the monthly repayments should be manageable.

It is important to remember that the property may not be occupied throughout the whole of the mortgage term. Lenders may wish to know how you will make repayments during periods when the property is vacant, though some protection policies cover the property for periods without rental income.

Your buy to let property may be repossessed if you do not keep up repayments on your mortgage.

Get in touch with a friendly, expert Cowens adviser to find out more