Most buy to let mortgages are interest-only meaning that monthly payments are smaller.
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What most hopeful landlords need to know is that buy to let mortgages are not the same as conventional residential mortgages. Different criteria apply and you cannot take out a standard residential mortgage on a property you plan to rent out.
If you do this and your lender finds out you could be forced to pay back the entire borrowed amount immediately. They might also put penalties or fines in place and make you switch to a higher mortgage rate.
Higher Rates
Larger DepositsMany lenders require that clients are over a certain age before they will permit them to take out a buy to let mortgage. They also ask that you have an income which will easily cover the mortgage during times when the property is unoccupied.
Most buy to let mortgages are interest-only meaning that monthly payments are smaller.
With this type of buy to let mortgage the lender is offering a rate lower than their standard one.
With this type of mortgage, landlords might see rates vary each month, but they will not go over a certain percentage.
This kind of mortgage comes with a guarantee that landlords will pay a constant rate for the duration of their mortgage.