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First Time Buyer Mortgages and remortgages

Buy to Let Mortgages

Buy to Let mortgages are in many ways just like ordinary mortgages, but with some key differences:

  • Interest rates on Buy to Let mortgages tend to be higher
  • The minimum deposit for a Buy to Let mortgage is usually a quarter (25%) of the property's value (some lenders offer deals with a 20% deposit, others want 40% deposit)
  • The fees tend to be much higher

Most Buy to Let mortgages are interest only, which means you don't pay anything off the lump sum borrowed each month, but of course, at the end of the mortgage term you will repay the capital in full. A Buy to Let mortgage is not regulated by the Financial Conduct Authority (FCA).

When buying a second property to let, you will need to decide whether your primary objective is income or capital growth. In other words, are you looking to make profit month on month or are looking to make a profit through increased equity from the second property if it increases in value over time? The decision may affect the type of property and purchase, and the location.

When you are choosing a property to let, it is wise to take advice from local letting agents to determine; what types of properties are in need and which parts of the town are best or most wanted. The can tell you if there is a University in the town, and if students are looking for somewhere to live.

A MORTGAGE IS A LOAN SECURED AGAINST YOUR PROPERTY. YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

MOST FORMS OF BUY-TO-LET MORTGAGE ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.