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Buy to Let - Mortgages
The Buy To Let Mortgage
Buy to let mortgages offer all the same types as with a normal residential mortgage, however generally speaking the interest rate of a buy to let mortgage is higher, but there are some very good deals to be found if you take the time to hunt for them.
In the past a lot of people have obtained a 100% buy to let mortgage, that is a buy to let mortgage which is the value of the whole property, and their rental income just pays the interest of the mortgage hoping that the value of the property will go up which will be their capital gain, however there is an element of risk in this buy to let strategy. In the long term data has shown that property prices do rise, so if you are considering a purchase to let plan and are planning to have the property for ten or more years then you will probably ride out when property prices do fall, but please remember that buy to let is an investment, and as with most investments there are risks.
Currently most buy to rent mortgage companies will lend based on about 80% of the property, therefore you will be required to find a 20% deposit. The buy to let mortgage company will also consider the type of property you are buying, whether it is worth the price you are buying it for and the rental income for the location of the property. All of these factors will be considered when the company takes a decision on how much you will receive.
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