A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
In a few ways, Buy to Let mortgages are similar to regular mortgages (for instance, the process), but usually, the deposit required for a Buy to Let mortgage is more reasonable.
Buy-to-let properties are an ideal investment option, It’s important, however, to remember that an upfront deposit is necessary before moving forward with this decision.
How much deposit do you need for a buy-to-let mortgage?
It was once possible to get a Buy Let mortgage with only a 15% deposit, but those deals are scarce now. If you can find one of these low-deposit mortgages, expect to pay higher interest rates. The more inexperienced you are with Buy to Let, the harder it will be to get a good mortgage deal unless you have saved up for a decent deposit — anything over 25%. With such deposits though, lenders will offer much better terms and conditions.
The table below outlines how much deposit may be needed for properties of different values. The larger the deposit, the less you will need to borrow from a lender- making you appear more responsible and trustworthy. Lower rates will come with this increased responsibility. However, it’s important not to forget that there are other costs which can inflate the final expense such as arrangement fees, and some lenders may have different criteria and requirements for buy-to-let mortgages, so it is advisable to compare different options and seek professional guidance from local mortgage brokers before applying.
How to apply for a Buy to Let mortgage
Because the Buy to Let mortgage market is so competitive, lenders are very cautious and have strict requirements before they will approve a loan.
- Typically, you will need a deposit of 25% of the purchase price for an easier transition. If you have less than that, you may not be able to find rates or offers that meet your needs.
- For new build properties, the Buy Let deposit required is usually around 35%. This is because lenders consider new properties or first-time buyers as higher risk.
- In most cases, lenders will require evidence that the monthly rental income is at minimum 125% of the amount being put towards the mortgage each month.
Before approving a Buy to Let mortgage, most lenders will assess your personal situation.
- A minimum age of 25+ is typically required.
- A minimum income of around £25,000+.
- Furthermore, a financial assessment and credit checks will also be carried out.
Before landlords can build a property portfolio, there are usually different requirements that must be met for approval.
What are the benefits of using a Buy to Let mortgage broker?
Here’s why Your Mortgage Experts is the best option for you if you’re looking for a Buy to Let deal.
- We have award-winning deals
- Our team has years of experience and product knowledge
- You’ll always receive friendly, impartial advice from us
- There are no obligations attached to our free quotes
- We have comprehensive access to the entire market
- Plus, we already have existing relationships with lenders
In addition, we have customer service available to help you Monday through Friday from 9 am to 8 pm. Our knowledgeable and friendly staff will be happy to answer any questions you have and help steer you towards a product that is right for your needs. Learn more about how Buy to Let mortgages work, how to make money from them, and consider these 12 factors before making a decision!
Luca Bertolino
Mortgage ExpertYour Mortgage Experts is led by Luca Bertolino with 20 years experience in financial services and in the property market. Through Luca’s wealth of knowledge and expertise, Your Mortgage Experts have become a trusted adviser that clients have come to rely upon for all their mortgage and protection needs.
