Buy To Let

Buy to let mortgages are mortgages designed to be secured against property which is to be let out to a tenant. The basic idea is that the rent will cover the mortgage payments by some margin, enabling the property owner to make a profit and also benefit from any potential increase in the property value.

Buy to let mortgages vary in many of the same ways as traditional residential mortgages, meaning their are lots of options depending on what exactly you are looking for. At Gladstone Mortgage Services we are experts in buy to let mortgages and will be able to offer the specialist advice you will require, ensuring you get the very best terms available.

How it works

With buy to let mortgages, lenders typically require a minimum deposit of 25% which can either come from your own savings or be raised against another property that you own, including your main home. The mortgage provider will lend the remaining funds secured against the property in the traditional fashion.

When the lender sends a surveyor to value the property, they not only look at the value of the property if it was to be sold, but also the value of the rent they would expect that property to generate. Lenders typically want to see that the rent coming in covers the mortgage payments by 125% on an interest only basis, although this requirement can vary between lenders and sometimes be more stringent.

Unlike traditional residential mortgages, buy to let mortgages lenders typically don't base their decision to lend on the affordability of the individual applying for the mortgage. Instead they expect the rent to cover the mortgage so aren't as concerned with the applicants ability to afford the monthly payment. Some lenders have minimum income requirements, but others are concerned only with the ability of the property to be self financing.

Another big difference is that unlike residential mortgages, where you will be expected to take the mortgage on a repayment basis uness you have an acceptable repayment vehicle, with buy to let mortgages you can typically take the mortgage on an interest only basis as it is an investment property which can be sold towards the end of the term as a means of repaying the loan.

Your property may be repossessed if you do not keep up repayments on your mortgage.

The FCA does not regulate some forms of buy to let mortgages.

For mortgages we usually charge a fee of £395 plus commission from the lender.