Buy-to-Let Mortgage Advice
Working together so your property investments make good financial sense
Working together so your property investments make good financial sense
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Investing in property can be an attractive financial option
Whether it’s income to support you through retirement tax efficiently, an investment at any point in your life or simply a way to cover the costs of a property you’re not ready to sell, there are many good reasons why a Buy-to-Let mortgage would be right for you. Whatever you’re looking for, our advisers will talk you through all the appropriate options and help you find the right mortgage provider.
Types of Buy-to-Let mortgage
Most Buy-to-Let borrowers choose to take out interest-only mortgages, which means you’ll only make monthly interest payments rather than repayments on the loan itself. This usually means lower outgoings each month, but remember that you’ll need to pay off the full amount at the end of the term. Repayment Buy-to-Let mortgages are increasingly popular because they spread the cost of the mortgage over its lifetime.
If you choose a fixed rate mortgage, the interest rate you pay stays the same throughout the length of the deal. If you pick a variable rate mortgage, the interest rate can change at any time.
How much can I borrow?
How much can I borrow?
There are three aspects to working out much you’ll be able to borrow:
- Your deposit
- Your personal financial circumstances
- The amount of rental income you expect to receive from the property.
Typically, mortgage providers need your rental income to be 25–30% higher than your mortgage payment.
Our advisers can guide you through the details and help you find the mortgage products that best suit you.
Checking affordability
Providers usually have a maximum loan-to-value (LTV) they’re prepared to offer, which is the maximum loan you can take out as a percentage of the property value. Buy-to-Let mortgages are more expensive than residential ones, and usually require deposits of between 25% and 40%.
How much can I borrow?
There are three aspects to working out much you’ll be able to borrow:
- Your deposit
- Your personal financial circumstances
- The amount of rental income you expect to receive from the property.
Typically, mortgage providers need your rental income to be 25–30% higher than your mortgage payment.
Our advisers can guide you through the details and help you find the mortgage products that best suit you.
Providers usually have a maximum loan-to-value (LTV) they’re prepared to offer, which is the maximum loan you can take out as a percentage of the property value. Buy-to-Let mortgages are more expensive than residential ones, and usually require deposits of between 25% and 40%.
The tax implications of being a landlord
If you’re in England and Northern Ireland, you’ll need to pay more Stamp duty, while you’ll have to pay more Land and Buildings Transaction Tax (LBTT) in Scotland and more Land Transaction Tax (LTT) in Wales.
Download our Stamp duty guideYou’ll also need to declare all income from the property, and tax relief for finance costs is restricted to the basic rate of income tax. As a result, your tax bill is likely to be higher, especially if you’re a higher or additional rate taxpayer.
You will be liable for capital gains tax if you sell your Buy-to-Let property.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Most Buy-to-Let mortgages are not regulated by the Financial Conduct Authority.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.