Whether you’re an experienced landlord looking to expand your portfolio of properties, or you’re just starting out, a buy to let mortgage could provide you with the funds you need.
Find out what a buy to let mortgage is, how they work and how you can apply.
A buy to let mortgage is a type of property finance designed for either businesses or individuals who want to purchase residential property for the purpose of renting it out to tenants. Buy to let mortgages will have different terms and interest rates compared to residential mortgages. It’s important to remember that you won’t be able to get a buy to let mortgage if you plan to live in the property yourself as your main residence.
The process of getting a buy to let mortgage works in a similar way to a residential mortgage, however there are a couple of key differences, such as the deposit and documents required.
The rates you can access on a buy to let mortgage will depend on a number of factors including:
A buy to let mortgage will typically have a higher interest rate compared to a residential mortgage. This reflects the increased risk associated with investment properties.
The eligibility criteria for a buy to let mortgage can differ depending on which lenders you apply to. For example, high street banks tend to have stricter criteria than more specialised alternative lenders.
Typically, if you’re looking for a buy to let mortgage, you’ll need to meet the following criteria:
The Capitalise platform connects you with 100+ UK business lenders and allows you to apply to multiple with just one application. This means you can compare your buy to let mortgage offers to find an option that works best for you.
Buy to let mortgages typically have terms ranging from 5 to 20 years. The exact length of the mortgage will depend on what the lender offers and what you choose to opt for. When you’re considering a term length, bear in mind that shorter-term mortgages may have higher monthly payments but result in lower overall interest costs, while longer-term mortgages can offer lower monthly payments but higher overall interest costs.
Generally, buy to let mortgages tend to have lower interest rates and fees compared to commercial mortgages. This is because buy to let mortgages are secured against residential property, which is considered less risky by lenders compared to commercial properties. Additionally, buy to let mortgages often come with longer loan terms, which can further reduce monthly repayments. However, the specific costs and terms can vary.
A let to buy mortgage is a type of loan secured against a property that will be let out to tenants to generate income. A let to buy mortgage cannot be used to purchase a property that the borrower intends to live in.
