Buy to let mortgages

Investing in property to let out is one of the best ways to save and make money. Even so, there are numerous risks involved in buying property and it is important to ensure you do your due diligence. If you are thinking of investing in property, buy to let properties can be superb investment options. Becoming a landlord and looking to invest in property for the primary purpose of renting properties out is a significant commitment, but one which few other investments can match in terms of potential cash flow and capital growth.

Buy to Let properties can be used for cash flow or long term investment and capital growth so whether you are looking to purchase your first buy to let, expand your existing portfolio or simply want to refinance on to a better interest rate we have a multitude of options to consider

What are buy to let mortgages?

A buy to let mortgage is a type of mortgage specifically sold to individuals or companies looking to buy property as a form of investment as opposed to a place to live. If you are interested in buying a property for rent, most lenders prefer that you do not finance it with a standard residential mortgage and will instead recommend a buy to let mortgage.

Typically, buy to let mortgages are more expensive than standard mortgages. For the most favorable rates, the lender may also require deposits of between 25% and 40%, although we do have access to some lenders who will consider deposits as little as 15%.

What to consider when going for a buy to let mortgage

The most important factor to consider when getting a buy to let mortgage is the monthly interest rate. The amount you pay in interest depends on the size of the initial loans, the property’s rental value, and your current financial situation. It is important to consult with your broker and accountant before deciding on the best loan type to take out.

Types of buy to let mortgages

You can choose to get a personal buy to let mortgage or a limited company buy to let mortgage.

Personal buy to let mortgages

This is simply buying property to let in your name. The terms of personal but to let mortgages have changed since the implementation of tax changes in 2017. This makes it more difficult for property owners to large amounts of money property as was the case before, there have in recent times been some of the more favorable tax breaks and perks removed from those investing in property in their own personal name.

Limited company buy to let mortgages

This refers to buying rental property under a company under a special purpose vehicle (SPV). This way, you get to own the rental property under a limited company name. This option can allow you to raise money from the property for reinvestment purposes and investing under an SPV can have some beneficial perks and tax incentives. Careful consideration should be given to whether you invest in property through your own personal name of a limited company. Speaking with an accountant and/or tax specialist will help you decide which is the preferred route according to your circumstances.

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