Introduction to Buy-to-Let Mortgages

If you are wanting to buy a property to rent out, then more likely than not you will need a buy-to-let mortgage. Rules surrounding buy-to-let mortgages are different to those relating to residential mortgages and reflect the additional risk associated with buying property as an investment rather than as a home.

Most lenders will require a deposit of at least 25% and a minimum income of £25,000 per year. Many will impose a maximum age of 70 or 75 by which the mortgage should end, so if you are age 60 when you take out the mortgage, you are looking at a maximum loan term of 15 years.

Typically buy-to-let mortgages are set up on an interest only basis, although many of the types of mortgage available for residential purchase such as fixed rate, discounted, and variable rate are available to the buy-to-let borrower.

Whether you are arranging finance for a single buy-to-let property or a portfolio of properties, specialist advice is a good idea. As well as the issues revolving around the borrowing, you should also consider other things such as the benefits or buying in your own name or as a Limited Company.