Over the past decade or so, the buy to let market has been revolutionised, with lenders offering all sorts of different mortgage products to buy all sorts of properties, from a straightforward single unit property such as a terraced house, to much more complex properties such as HMOs (Houses of Multiple Occupation) and MUFBs (Multi Unit Freehold Blocks).
The decision any mortgage lender will make as to whether or not a mortgage will be offered / how much money they will lend, is usually based on the rent you will earn and not your income. Some lenders will calculate the rental income on 125% – 130% of the monthly mortgage payment at a nominal rate of between 5% & 6%.
No, FFP has access to lenders who have a no minimum income rule and base their decision on the rental income the property may achieve however, the majority of lenders do require you to have a minimum income of more than £25,000 per annum.
Yes, you can have interest only on a buy to let mortgage no matter what the loan to value is. Unlike residential mortgages, most buy to let mortgages are not regulated and are therefore not subject to the same interest only criteria that residential mortgages are subject to.
Buy to let mortgages typically have slightly higher interest rates than residential mortgages.
Typically, a minimum of 20% – 25% is required.
Is typically on interest only, but you can have a buy to let mortgage on capital repayment.
In other words, are you looking to make a profit month on month or are you looking to make a profit through increased equity from the second property as it increases in value over time? The decision may affect the type of property you purchase and whether you choose interest only or a capital repayment mortgage.
Yes – you can take out multiple mortgages with different lenders – but in most cases, it is only possible to have one loan per property. This is because the loan is secured on the title of the property – and each lender would want to have first claim – should anything go wrong!
Yes, you can.
Yes – although often lenders expect that the Limited Company is formed for the sole purpose of purchasing, owning, and managing properties – an SPV (Special Purpose Vehicle). See our dedicated Limited Company buy to let page for further information.
Most buy to let mortgages are not regulated by The Financial Conduct Authority, however as of 21st March 2016, some forms of buy to lets transactions are now regulated. These are known as “Consumer Buy to Lets”. Consumers buy to let landlords are in essence landlords that become landlords by accident. Examples of these are those who inherit a property that is let out and those who move house but decide/need to retain their existing property as a buy to let. These type of transactions are assessed according to the same strict affordability rules as a residential mortgage.
If you have 4 or more mortgaged buy to let properties, then you are classed as a portfolio landlord. These include properties held in a single name, joint names and a limited company. If you fall into the category of a portfolio landlord then you will be subject to additional stress tests which includes stressing the rental cover of the whole portfolio and not just the property that you are buying or refinancing. You may also be subject to more paperwork, which can include:
ANY PROPERTY USED AS SECURITY, INCLUDING YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. MOST FORMS OF BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.
FFP SolutionsOld Bank Chambers, High Street,St Asaph, LL17 0RD
Registered in England and Wales Company No. 08958626, Registered Address: Unit 32 Llys Edmund Prys, St. Asaph, Denbighshire, LL17 0JAFFP Solutions Ltd is a credit broker and not a lender and is entered on the FCA register under reference 624257You can find FFP Solutions on the Data protection public register under reference: ZA056605
YOUR HOME OR YOUR COMMERCIAL PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
THE GUIDANCE PROVIDED WITHIN THIS WEBSITE IS SUBJECT TO THE UK REGULATORY REGIME AND IS THEREFORE PRIMARILY TARGETED AT CONSUMERS IN THE UK
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