Question 1

Who is Capitalise and how can you help me secure funding?

Accepted Answer

Capitalise is an FCA-regulated platform built to support UK businesses in taking control of their financial health. We make it easy for business owners to access funding by connecting them with over 100 trusted UK lenders.Our intelligent platform matches you with lenders based on your business needs and ranks options based on past success rates - helping you make confident, informed decisions.When you apply through Capitalise, you're not alone. Every application is supported by a dedicated funding specialist who will:[object Object],[object Object],[object Object]With Capitalise, you can compare offers side by side and secure the best funding solution for your business with expert support at every step.

Question 2

How much will a buy to let mortgage cost?

Accepted Answer

You can calculate how much your buy to let mortgage will cost using the following formula: Deposit + total loan amount + total interest + any additional feesYou can use the buy to let mortgage calculator above to get an estimate of how much it will cost and how much you can expect to repay each month. You should also bear in mind that a buy to let mortgage will include additional costs such as solicitor fees, valuations and property survey.

Question 3

How do you calculate buy to let affordability?

Accepted Answer

Buy to let affordability is typically calculated based on the potential rental income of the property and the landlord's ability to cover mortgage repayments. Lenders usually require the rental income to be a certain percentage higher than the mortgage payments, often around 125%. This ensures there's a buffer to cover maintenance costs, void periods, and other expenses.

Question 4

What deposit is needed for a buy to let mortgage?

Accepted Answer

Typically, buy to let mortgages require a larger deposit than you may be used to with a residential mortgage. Depending on which lenders you apply to, you will need a minimum deposit of between 25%-35% of the property's purchase price. Having a substantial deposit more than 35% will improve your chances of securing a mortgage and may reduce the interest rates you’re offered.

Question 5

What rates can I get with a buy to let mortgage?

Accepted Answer

Buy to let mortgage rates can vary depending on the lender, your creditworthiness, and the loan to value (LTV) ratio. Generally, interest rates for buy to let mortgages tend to be higher than those for standard residential mortgages. It's a good idea to compare rates from different lenders to find the best option. that suits your business. You can use Capitalise to apply up to 4 lenders in just one application so you can easily compare to find the best rates for a buy to let mortgage.

Question 6

What will my monthly repayments be for a buy to let mortgage?

Accepted Answer

Your monthly mortgage repayments on a buy to let property depend on the loan amount, interest rate, and the length of the mortgage term. By using the buy to let mortgage calculator, you can easily determine your estimated monthly repayments. This information will be important for budgeting and ensuring you have enough ,[object Object],.

Question 7

Can you get a buy to let without a deposit?

Accepted Answer

No, you won’t be able to get a buy to let without a deposit. Lenders will require you to have at least 25% of the property’s purchase price, in some cases this will be more.

Question 8

How much rent will I need for a buy to let mortgage?

Accepted Answer

The amount of rent needed for a buy to let mortgage depends on the lender's criteria and the specific terms of the mortgage. You can use the stress test calculation above to see how much you would need in rental income.

Question 9

Are there any other considerations to be eligible for a buy to let mortgage?

Accepted Answer

If you’re looking for a buy to let mortgage, bear in mind that lenders are likely to want more information than a standard ,[object Object],. Try to pull together the following information for your application:[object Object],[object Object],[object Object],[object Object],[object Object]

Question 10

What is the formula for buy-to-let stress test?

Accepted Answer

The formula for the buy to let stress test involves calculating whether the rental income from the property is sufficient to cover the mortgage payments, factoring in a stress scenario where interest rates may rise.[object Object][object Object]Determine the potential rental income from the property. This is usually based on market rates for similar properties in the area.[object Object]The ICR is the ratio between the rental income and the mortgage payments. Lenders typically require the rental income to cover a certain percentage of the mortgage payments, often between 125% to 145%.Let's use the following example: Property value = £200,000,[object Object],Mortgage term = 20 years,[object Object],Interest rate = 5%,[object Object],Monthly mortgage repayment: £1,319 So if your mortgage repayments for the property are £1,319 per calendar month (pcm) and the lender requires an ICR of 125%, you can calculate the ICR like this: 1319 x 1.25 = 1648.75This would mean the potential rental income of the property would need to be at least £1,648.75 pcm to meet the lender’s requirements. [object Object],[object Object],As mortgage rates can fluctuate, lenders may also add a stress test rate to their affordability calculation. This is usually the mortgage interest rate plus a percentage, representing a potential increase in interest rates.It's important to note that the specific stress test rate used in the calculation may vary depending on the lender's criteria and the market conditions.,[object Object],In this example, we’ll assume that the stress test rate is 6%. Property value = £200,000,[object Object],Mortgage term = 20 years,[object Object],Interest rate = 6%,[object Object],Monthly mortgage repayment: £1432.  This means that if the potential rental income of the property is less than £1432, then the buy to let mortgage might not get approved. ,[object Object],

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