Correct at 31/03/2021
Whether you’re thinking about becoming a landlord for the first time, adding to your property portfolio, or remortgaging an existing Buy to Let property, L&C is here to help.
We’ve got access to a wide range of Buy to Let interest only mortgage deals, with our online Mortgage Finder making it easy to filter your available options. Our specialist advisers will compare deals from over 50 Buy to Let lenders to find the best one for you, and once you’re ready to go ahead, you can apply online and track your application 24/7.
Don’t delay, get in touch with L&C today and find out how we can help.
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Buy to Let interest only mortgages have several differences to residential mortgages, including how affordability is assessed and the size of the deposit you’ll need to put down.
With a Buy to Let interest only mortgage, each month you only pay back the interest you owe on the amount you’ve borrowed, so your monthly payments will be much lower compared to a repayment mortgage where you also pay back some of the capital. But unlike a repayment mortgage, you’ll need to pay the amount borrowed in full at the end of the mortgage term.
Buy to Let rates can be slightly higher than standard residential mortgage rates, as lenders consider tenants higher risk than owner-occupiers. You’ll also need a larger deposit to secure a Buy to Let mortgage, typically 20% to 25% of the property value.
The amount you’ll be able to borrow will depend mainly on the monthly rental income you expect to receive, as well as your other income and outgoings. You can talk through all the mortgage options that might be available to you with one of our mortgage experts. They can help you choose the best mortgage for you based on your individual circumstances, helping you keep your costs as a landlord to a minimum.
Most Buy to Let landlords choose to take their mortgage on an interest only rather than a repayment basis in order to keep their costs down. The capital borrowed is paid in full at the end of the agreed mortgage term. Find out more in our guide: ‘How do Buy to Let mortgages work?'
Whether you’ll be eligible for an interest only Buy to Let mortgage will depend on several factors, such as the size of deposit you can afford to put down, how much rental income you expect to receive, and what your annual income is. You can find out how much you might be able to borrow using our Buy to Let mortgage calculator.
While it’s possible to take out a residential mortgage with a deposit of just 5% of the property value, you’ll usually need to put down a much larger deposit, typically 20% or 25% with a Buy to Let interest only mortgage. Learn more in our Buy to Let mortgage guide.
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