Buy To Let Mortgage Advice

The minimum deposit for a buy-to-let mortgage is usually 25% of the property's value (although it can vary between 20-40%). Most Buy to Let mortgages are interest-only.

This means you pay the interest each month, but not the capital amount. At the end of the mortgage term, you repay the original loan in full.

The simple answer is yes, but you may be limited when it comes to getting a mortgage. The first question to ask is, are you a first time landlord or a first time buyer?

This is key as a large percentage of lenders need you to own your own residential property (possibly for at least six months) before they will offer you a buy to let mortgage. Some lenders just need you to own a property, so you could have another buy to let property but live in rented accommodation.

If however you are a complete first time buyer (or don’t currently own a property) then your mortgage options will be limited. An adviser will know the best lenders to speak to if you fall into any of these categories.

If your property is going to be let to several tenants who aren’t members of the same family, it may be a ‘House in Multiple Occupation’ (HMO). A property is classed as an HMO if at least 3 tenants live there, forming more than one household and if toilet, bathroom or kitchen facilities are shared.

Depending on the type of property and where it is, an HMO licence may be required – check with your local authority whether a property is deemed to be an HMO and whether a licence is required.

When it comes to getting a mortgage on a property classed as an HMO, the choice of lenders will be limited but an adviser will be able to help.

You can find more information on HMOs here – www.gov.uk/renting-out-a-property/houses-in-multiple-occupation-hmo

Lenders use a calculation based on the estimated rental income to determine how much you can borrow. This is a complex calculation so speak to your adviser if you have a property in mind.

If you already own another property either your own residential property or another Buy to let you will need to pay an additional 5% on top of the normal stamp duty tax.